Recent reports indicate that Adidas and Beyoncé have agreed to part ways after the superstar’s Ivy Park activewear line fell short of annual sales expectations by more than $200 million. The Hollywood Reporter discussed the business development, saying “A source close to the situation tells The Hollywood Reporter that the Grammy-winning entrepreneur and the German lifestyle brand have mutually agreed to part ways.”
Since the partnership with Adidas in 2018 and the subsequent relaunch of the activewear brand, Ivy Park has been underperforming its financial targets. In February, the Wall Street Journal reported:
Beyoncé’s fashion partnership with Adidas AG decrease; red down pointing triangle has produced weak sales of her Ivy Park clothing brand, according to documents and people familiar with the matter, leaving a roughly $200 million hole in the company’s annual projections.
Sales of Ivy Park tumbled by more than 50% to about $40 million in 2022—coming in below internal Adidas projections for $250 million in sales that year, documents reviewed by The Wall Street Journal show. The documents show Ivy Park has been losing money for Adidas and Beyoncé gets about $20 million in annual compensation.
The contract between the pop star, whose full name is Beyoncé Knowles-Carter, and the German sneaker giant is set to end after 2023, and Adidas executives have discussed either ending or revamping the arrangement, the people said.
“The company sought to diversify its portfolio with women and hoped to replicate the success that it had with Mr. West,” the Wall Street Journal reported, “Adidas executives expected hundreds of millions of dollars in Ivy Park sales and promised Beyoncé guaranteed annual fees and creative control — but it soon became clear that Ivy Park collections weren’t gaining the traction that Yeezy products did.”
According to Fox News, Ivy Park sales were on track to hit about $40 million at the end of last year, down from $93 million in 2021. For 2023, Ivy Park sales were projected to reach $65 million, compared with an earlier Adidas target of reaching $335 million.
That stands in stark contrast to the huge success Adidas had with Kanye’s “Yeezy” clothing line, which the company cut after he made high-profile, anti-semitic comments. Fox Business, reporting on that decision, said:
Adidas, a global sportswear seller with a roughly $30 billion market capitalization, lowered its earnings outlook in November after it cut ties with Ye following antisemitic comments by the rapper and workplace complaints involving him. Adidas had worked with Ye for years to build the Yeezy brand into one of its biggest sellers.
The Root, discussing why the brand might have failed, said:
Ivy Park never quite felt like it matched her public persona. The girl from Houston might be all about stylish tracksuits and sneakers, but Beyoncé, the global megastar, doesn’t put out that vibe. From a fan perspective, you trust brands when they align with someone’s area of expertise. It’s why athletes sell sneakers and chefs sell cookware and food products. Rihanna
became famous for the sex appeal of her music, which is why Savage x Fenty and Fenty Beauty make perfect sense.
Notice: This article may contain commentary that reflects the author’s opinion.
