In recent months, Adidas made headlines after it dropped a pricey deal with Kanye West, denouncing anti-semitism in the wake of controversial comments Ye had made. It wasn’t easy or lucrative to shift away from the deal the sportswear brand had made with the rapper, and reports over the past week have indicated Adidas could lose a billion dollars after severing ties. Yes, one billion. The bad news continues coming down the pipeline, however, as it turns out its line with Beyoncé is also losing money.
Beyoncé signed on with the brand back in 2019, several years after Kanye West kicked off his Yeezy collaborations with Adidas in 2013. At the time she called it the “partnership of a lifetime,” seeing it as a way to get her burgeoning Ivy Park brand to the next level. Unfortunately, that hasn’t been the case.
How Much Money Adidas Could Lose On Beyoncé’s Clothing Collaboration
As it turns out, a report about internal sale projectections shows that revenue from Ivy Park brand clothing dropped 50% this past year. That report (via the Wall Street Journal) notes the brand only sold $40 million in revenue last year, a number the outlet called “weak.” It’s also far below the number the company itself projected, which had noted Ivy Park could make as much as $250 million in sales last year.
That’s more than $200 million in projected revenue the brand did not make. In addition, reports note that with five recent Ivy Park releases, around half of the merchandise Adidas pushed out did not sell. That’s five out of the last six releases in total not really hitting the numbers the company thought.
Meanwhile, Beyoncé herself is still pulling in quite a hefty amount of moolah for the deal, allegedly making $20 million a year from the brand for the collaboration. The singer’s current deal wraps at the end of 2023, after which Adidas could re-up or decline to move forward. Maybe the powers that be should consider a line of crystal Renaissance bikinis?
How Much Adidas Has Lost On Kanye’s Clothing Collaboration
Meanwhile, the losses Beyoncé’s Ivy Park brand incurred in 2022 pale in comparison to the amount the company is allegedly losing after dropping ties with Kanye West. While Ye is currently living the newlywed life with new wife Bianca Censori, Adidas is attempting to recover after being unable to sell Yeezy shoes and clothing it had already produced.
Per a financial report from the company, Adidas is projecting it will lose $1.3 billion in “full-year revenue.” Its operating profit will suffer to the tune of $533 million. And, if the company doesn’t figure out how to “repurpose” the former Kanye West-related merch, the losses will likely be even higher. However, the company may try to sell the shoes and merch it already produced, but with none of the Yeezy identifiers.
The sportswear label and Kanye West parted ways in October, and the retailer reportedly stopped paying the rapper shortly thereafter. Adidas was not the only company to cut ties with Ye amidst his controversial statements.
The losses from Ivy Park, of course, pale in comparison to the Kanye numbers. However, they do indicate that Adidas has bigger problems than just one partnership gone wrong. In fact, in the same report, Adidas called it a “year of transition,” asking for some time to find the magic again. The full statement from CEO Bjørn Gulden is pretty honest about what the company is facing:
2023 will be a year of transition to set the base to again be a growing and profitable company. We will put full focus on the consumer, our athletes, our retail partners and our Adidas employees. Together we will work on creating brand heat, improve our product engine, better serve our distribution and assure that adidas is a great and fun place to work. adidas has all the ingredients to be successful: A great brand, great people, fantastic partners and a global infrastructure second to none. We need to put the pieces back together again, but I am convinced that over time we will make Adidas shine again. But we need some time.
What that means for Beyoncé’s overall deal is yet to be seen, but it does speak to how popularity as a singer or a fashionista does not necessarily translating into record sales. Regardless, in a separate statement Adidas declined to comment on Ivy Park growth and simply said the brand and “partnership is strong and successful.” So, I suppose we’ll have to wait and see what comes next.
source: cinemablend.com
