Beyoncé and the second-largest sports clothing business in the world, Adidas, have amicably agreed to separate ways.
In 2022, Ivy Park’s sales dropped by more than 50 percent to $40 million, much below the $250 million Adidas anticipated.This has caused the company to send a profit warning to investors as it tries to get out of a billion-dollar hole and focus on what it does best.
The Summary You Need to Know:
According to CultureBanx, Adidas’s biggest difficulty in recent years has been its strategy of focusing on relationships with musicians such as Bad Bunny, Pharell Williams, and rapper Ye (aka Kanye West).
Neither one of these partnerships regularly reached or exceeded its financial goals.
Ivy Park’s income was $93 million in 2021 and $40 million in 2022, compared to the predicted $250 million.
According to the Wall Street Journal, revenue projections for 2023 are well below the targeted $335 million.
Beyoncé’s deal with Adidas, which pays her $20 million per year, was slated to expire at the end of the year.
“Adidas has all the elements for success, but we need to refocus on our core: product, customers, retail partners, and athletes,” Adidas CEO Bjrn Gulden stated during the company’s earnings call in early March.
The Hollywood Reporter says that Ivy Park, Adidas, and Beyoncé have all had very different creative styles.
Maybe for this reason, the CEO of Adidas emphasised that athletes, not celebrities, should be the primary focus.
The sports and footwear clothing company expects to have an operational deficit of 700 million euros for the whole year of 2023.
This would be the first annual loss for Adidas in 31 years.
After parting ways with Ye, Adidas has $750 million worth of Yeezy-branded inventory that it may never sell.
With the pricey termination of its collaboration with Ye’s Yeezy brand in October 2022, the firm revealed a significant fourth-quarter loss and reduced its dividend this month.