Adidas Set To Dump Beyoncé As Clothing Brand Crumbles
German sportswear maker Adidas AG will sever ties with Beyoncé following disappointing sales, The Wall Street Journal reported, citing people familiar with the matter. The news comes months after the collapse of its Kayne West partnership.
Adidas plans to end its contract with Beyoncé Knowles-Carter by the end of the year. The reason for the move is because of the music star's underperforming Ivy Park clothing brand. In 2022, the brand recorded a 50% plunge in sales.
Even though Ivy Park is a money-losing venture for the German sportswear maker, Beyoncé still receives a $20 million per annum payout. And she has recently moved on to collaborating with French luxury designer Balmain.
There was no word on why the Ivy Park brand failed -- maybe because it was 'woke,' offering inclusive sizing and gender-neutral styles.
Besides Ivy Park, Adidas suffered a massive financial blow with the demise of its partnership with West's Yeezy brand. The company recently warned that it's sitting on a $1.3 billion pile of unsold Yeezy products.
Adidas terminated its partnership with West in October after he repeatedly made antisemitic comments on social media.
The Yeezy line accounted for 7% of Adidas' total sales last year, according to analysts from S&P Global Ratings.
Shares in Adidas trading in Frankfurt have been halved since last 2021.
Adidas warned with the fallout of its partnerships that revenue would decline by a single-digit-percentage amount in 2023 and aims for a reset:
"2023 will be a transition year to build the base for 2024 and 2025," CEO Bjørn Gulden, who took charge at the start of this year.
The Germans certainly have a talent for picking the right influencers to sell shoes and shirts...