Break My Soul? Beyonce gives Adidas a new headache

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Adidas and Beyonce are parting ways, according to the Wall Street Journal.

The end of the partnership is the latest blow for the sportswear giant, which was already reeling from its split with disgraced musician Kanye West.

No longer having Beyonce’s Ivy Park collection on its roster takes away a potential route to making up for €1.2 billion ($1.9 billion) of sales that Adidas will lose this year as a result of its break from West, now known as Ye, late in 2022. On top of the Ye-shaped hole in its sales and profits, now the company has a Beyonce-shaped shortfall too.

The end of the partnership with Beyonce is the latest blow for the sportswear giantCredit:Invision

Ivy Park had its roots in a collaboration with fashion mogul Philip Green in 2016. However, Beyonce bought Green out in 2018, after the former Topshop owner faced accusations of sexual harassment, racist abuse and bullying. Green denied the allegations. Less than a year later, the star teamed up with Adidas to produce Ivy Park, bridging the divide between fashion and sportswear.

But Adidas, grappling with supply-chain problems, the pandemic and then the dispute with Ye, never made the most of the partnership. You could say it was the best thing Adidas never had. The company could not be reached for comment on Tuesday.

Ivy Park sales were tiny, unlike those of Yeezy, the tie-up with Ye, which may have brought in €1.2 billion of sales and €500 million of operating profit this year. Instead, the German company is grappling with a mountain of unsold Yeezy sneakers. It could face a €700 million operating loss this year if it has to write off all of the Yeezy inventory.

Ivy Park could have been a way to make up for some of the lost Yeezy revenue. For example, Adidas could expanded the collection and perhaps brought in husband Jay-Z to develop a menswear line. Instead, losing Beyonce takes away another route for Adidas to reach a more diverse range of customers.

The retailer does have a partnership with Jerry Lorenzo, the American fashion and sneaker designer who founded the Fear of God label. With a tie-up with New York-listed Italian house Ermenegildo Zegna, he brings strong streetwear and fashion credentials. But this will likely take time to build and won’t be big enough to offset the absence of Yeezy and now Ivy Park.

New Adidas Chief Executive Officer Bjorn Gulden said earlier this month that the company had strength in the type of sportswear that helped athletes run faster and train harder. He also said that Adidas had struck a raft of collaborations, including with Prada, Moncler and Gucci and Balenciaga. Perhaps it had even tied itself too closely to designers, he suggested.

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