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After coming together with Adidas in 2018 to relaunch her athleisure brand Ivy Park, Beyoncé has parted ways from the sportswear giant, in a move that sources tell The Hollywood Reporter was mutual.
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The split was reportedly due to creative differences between Ivy Park and Adidas, with Beyoncé excited to “reclaim her brand, chart her own path and maintain creative freedom,” The Reporter writes.
During what Adidas referred to as “a partnership of a lifetime,” Ivy Park launched several collections, with the first launching in April 2019. The drop was fully equipped with a massive PR campaign involving closet-size traffic-cone-orange boxes being sent to celebrities including Missy Elliott, Cardi B, Kendall Jenner, Angela Bassett, Ciara, Reese Witherspoon and Hailey Bieber.
Despite the glittery promotional content, Ivy Park apparently did not live up to the hype Adidas was anticipating when they initially promised Beyoncé “guaranteed annual fees and creative control,” according to a Wall Street Journal piece from February. Instead of producing the hundreds of millions in revenue that Adidas expected — the company hoped Ivy Park would perform similarly to Ye’s Yeezy brand — Ivy Park releases undersold, with roughly half of the merchandise from five of the six releases remaining on shelves.
The Wall Street Journal article also indicated differences in strategy between Adidas and Ivy Park when it came to marketing, with the German multinational corporation pushing for their own branding. At the end of 2022, Ivy Park was predicted to reach $40 million in sales, down from $93 million the year prior. Although Adidas was positioned to lose at least $10 million in 2022, Beyoncé was set to make the same amount in compensation as previous years: $20 million.
Beyonce launched Ivy Park in 2016 with Top Shop owner Sir Philip Green. When the partnership ended in 2018, Bey’s Parkwood Entertainment acquired full ownership of the streetwear brand. Despite the breakup, Beyonce has much to look forward to considering the frenzy surrounding her upcoming Renaissance World Tour, kicking off in May. The mega-tour has already caused mayhem among fans eager to see the superstar IRL and will begin in Stockholm, spanning dates throughout Europe and North America.
Billboard has reached out to reps for Beyoncé and Adidas for comment.
Adidas is still wrestling with how to dispose of 1.2 billion euros ($1.3 billion) worth of Yeezy shoes after its breakup with the rapper formerly known as Kanye West, forcing the German sportswear maker into a big loss at the end of last year and expectations of more pain ahead.
CEO Bjorn Gulden said selling the popular line of shoes would mean paying royalties to Ye, who was dropped by Adidas five months ago after making antisemitic remarks on social media and in interviews. During an earnings call Wednesday, he pointed to “many variables” about what to do with the shoes now stacked in warehouses.
Destroying them could “raise sustainability issues,” though some companies have offered recycling solutions, said Gulden, who was named CEO after the blowup over Ye’s remarks. Restitching them to hide the Yeezy brand so they could be sold “is not very honest, so it’s not an option,” he added.
Suggestions to give them away to those in need in places like earthquake-hit Syria or Turkey would mean the product would “come back again very quickly” due to its high market value, “so that’s not really an option,” Gulden said.
If Adidas does decide to sell the shoes, “I can promise you that the people that have been hurt by this will also get something good out of it and get donations and proceeds in different ways, shapes or forms,” the CEO said.
Adidas split with Ye in October, following other brands that were facing pressure to end ties with the rapper over his antisemitic and other offensive remarks. The company is now struggling to find ways to become profitable again and replace its banner Yeezy line, which analysts have said amounted to as much as 15% of its net income.
The Ye breakup cost 600 million euros in lost sales in the last three months of 2022, helping drive the company to a net loss of 513 million euros. The decline, also attributed to higher supply costs and slumping revenue in China, contrasts with profit of 213 million euros in the fourth quarter of 2021.
More losses could be ahead, with the company forecasting a 500 million-euro hit to profit earnings this year if it decides not to repurpose the remaining Yeezy products in stock. The company is predicting a 2023 operating loss of 700 million euros.
Gulden said “so many companies” were willing to buy the popular shoes but that would mean paying royalties to Ye. Rumors that the company was in talks to sell them, however, “are not true.”
He had heard from “gazillions of people that have opinions about this, and of course when you’re sitting on the inside, it looks a little bit different than it looks on the outside.”
Gulden also said Adidas is still investigating former employees’ allegations that Ye created a toxic work environment and that the sportswear company knew about his problematic behavior and failed to protect workers.
The CEO called 2023 “a transition year,” saying “we can then start to build a profitable business again in 2024.”
Last year, fourth-quarter net sales were up a bare 1.3% at 5.21 billion euros from the same quarter a year ago. The company pointed to revenue dropping 50% in China and higher costs for supplies and shipping, which could not be offset by price hikes.
For the full year, the Herzogenaurach, Germany-based company said it made a net profit of 638 million euros on sales that rose 6%, to 22.5 billion euros.
Adidas also further shook up its leadership by replacing its top sales and marketing executives. Global sales head Roland Auschel will leave the company after 33 years and be succeeded by Arthur Hoeld, now head of the Europe, Middle East and Africa region.
Brian Grevy, head of global brands, will step down March 31. CEO Gulden will take on his product and marketing responsibilities.
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Source: Jeremy Moeller / Getty
In another bad sign for adidas after cutting ties with Ye aka Kanye West, their credit ratings have been cut by S&P Global due
to the company’s expectations of earnings losses for 2023.
In a disclosure statement that was published on Tuesday (February 21st), the noted agency that judges the ability of companies to pay back what they’ve borrowed declared that they were cutting the global athletic brand’s long and short-term credit rating from “A+” to “A-“. They based this on the company’s warnings that their earnings would take a serious hit after cutting ties with the controversial artist. Adidas had previously projected that the dissolution of their deal with Ye could cost them $1.3 billion.
“Adidas faces a multitude of business challenges, including the termination of its Yeezy partnership, ongoing competitive pressures in the Chinese market, and a contraction of consumer demand in Western countries,” it said in the statement. They went on to state that adidas’ warning had a tremendous effect on their decision, especially when it came to uncertainty over their remaining Yeezy stock that it could still write off and not refit for sale. “This estimate is materially worse than our previous base-case scenario.”
Adidas terminated its partnership with Ye in late October after the DONDA artist had made a string of antisemitic comments. This included an appearance on the Drink Champs podcast where he publicly challenged the brand over his behavior and comments taken from an unaired interview with Tucker Carlson of Fox News.
S&P Global Ratings is not the only group of its kind to have a gloomy outlook on adidas’ expected financial fortunes for the year. Bernstein Research published a report that the company might’ve experienced these struggles even if it maintained its ties with Ye. They also projected that Adidas could experience losses of $2 billion, more than the estimated figure expressed in their disclosure statement. “The sales decline is about more than just Yeezy,” Bernstein analyst Aneesha Sherman said in an internal note. “We are concerned about the underlying health of the business that would drive such a drastic guide-down, even after stripping out the Yeezy impact.”
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In a bid to get ahead of profit losses in the wake of its split with Ye aka Kanye West, Adidas intends to rebrand its Yeezy stock.According to reports, the global athletic brand pointed to a plan of repurposing its surplus of clothing and footwear already manufactured before its severing of ties with the controversial artist last October as a way to avoid a massive financial loss estimated at $1.3 billion. The company detailed this in a profit warning issued through its website last Thursday (Feb. 9th).
The move to repurpose the Yeezy stock under the Adidas name may play out through a couple of options. The first would see the company sell the inventory removing the Yeezy label and selling the product at its own stores and at a discount to other retail partners.
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Another option is for Adidas to sell the repurposed items in smaller markets outside of the United States. “Somewhere where it’s not visible in their primary markets would be one approach they might take”, said Marshall Fisher, a professor at the Wharton School at the University of Pennsylvania.
The brand could take the drastic move of destroying the remaining stock. The risk of further damaging its reputation is higher with this move as other companies who’ve done so have come under fire in the past. “We’ve seen that happen with other luxury brands out there who didn’t want to see their product discounted at the end of the season,” said footwear expert & former collaborator Matt Powell. Donating all of the stock is also on the table, and according to Fisher would go a long way to bolster Adidas in the eyes of consumers.
Adidas is still investigating the after-effects of ending the deal with Ye after he made several antisemitic comments last October. The brand said at the time that it does not tolerate antisemitism or other forms of hate speech. Shares in the company went down 11% after the news was announced.
—Photo: Source: Jeremy Moeller / Getty
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Adidas has released information that estimates the company could lose over one billion dollars after parting ways with Ye aka Kanye West, citing issues with moving previously manufactured stock as a cause.
On Thursday (Feb. 9), the athletic brand released a statement on its website concerning its estimated financial outlook for this year. It opened by addressing the company’s decision to end its partnership with the rapper last October, stating that it could lose $1.3 billion due to being unable to move the rapper and designer’s Yeezy clothing and footwear.
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“The numbers speak for themselves. We are currently not performing the way we should,” said adidas CEO Bjørn Gulden in the statement. “2023 will be a year of transition to set the base to again be a growing and profitable company.” The full report discloses that $534 million alone could be lost in operating costs for the year and “accounts for the significant adverse impact from not selling the existing stock.”
Adidas had previously expressed plans to sell the remaining Yeezy sneakers under its own name at a discount, which would save them $300 million in marketing fees and royalty payments. That option does come with some challenges. “All of this work is extremely labor intensive and it can only be done one shoe at a time,” said Matt Powell, a footwear retail expert. “So, it’s very costly to go through this process.” Destroying the goods is another option, but industry experts have advised against such a move.
The news comes after the company decided to sever its ties with Ye after the “Father Stretch My Hands” rapper made a series of antisemitic remarks in interviews and online. Initially putting the “partnership under review” after Ye wore a “White Lives Matter” t-shirt. Adidas made the decision to drop him after he appeared on the Drink Champs podcast and said, “I can say antisemitic s*** and adidas cannot drop me.” It follows behind the news that their IVY PARK collaboration with Beyoncé failed to match sales expectations last year, with sales dropping by 50%, according to reports.
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Source: ADIDAS / Ivy Park
Sales of Beyoncé’s Ivy Park clothing line, which is in partnership with adidas, are reportedly down 50%. The news certainly raises eyebrows since anything affiliated with Queen Bey is easy money, right?
While Ivy Park certainly sells, it seems like it didn’t live up to adidas’ projections, which are being described as “weak sales.”
Reports the Wall Street Journal:
Beyoncé’s fashion partnership with Adidas 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.
This news draws a contrast to the sales of Beyoncé’s forthcoming world tour. With tickets going for hundreds of dollars they’ve nevertheless been selling out shortly after availability. However, Ivy Park product has reportedly been sitting.
Adidas executives expected hundreds of millions of dollars in Ivy Park sales and promised Beyoncé guaranteed annual fees and creative control, the people familiar with the matter said. But it soon became clear that Ivy Park collections weren’t gaining the traction that Yeezy products did.
Ivy Park features inclusive sizing and gender-neutral styles. Along with neon-colored sweatsuits and sneakers, it also has dresses and accessories. Many of the Ivy Park products have failed to sell, the documents show. In five of the last six Ivy Park releases, roughly half of the merchandise that was produced went unsold, the documents show.
Ivy Park debuted back in 2016, and at the time was in partnership with the Topshop brand. She then acquired full ownership of the brand in 2018, before partnering with adidas a year later.
The issue could be that despite “weak” sales, Bey is still going to get her coins regardless.
Ivy Park sales were on track to hit about $40 million at the end of last year, down from $93 million in 2021, according to the documents. For 2023, the documents show Ivy Park sales are projected to reach $65 million, compared with an earlier Adidas target of reaching $335 million.
Adidas was on track to lose at least $10 million on the partnership in 2022, according to the documents. Meanwhile, Beyoncé was slated to receive about $20 million in compensation, the same as previous years, the documents show.
If Ivy Park and adidas do eventually go their separate ways, where will Bey go next? You can bet brands like a Nike or Lululemon or doing the Birdman handr ub.
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Source: ADIDAS / adidas
adidas announce Jenna Ortega as the latest addition to its family, as the face of a soon-to-be-unveiled label, its first in 50 years.
Coming together with a shared commitment to moving through the heart of culture with style, passion, and purpose, Jenna Ortega is who adidas has chosen to embody how the next generation is showing up in the world and who this new label is designed to represent. An innovative on-screen icon, avid soccer fan, and yogi, who harnesses her power to voice what she truly believes in and stands for, Jenna Ortega’s progressive persona and relentless pursuit of creativity seems to be what made her a no brainer to be the face of the new label.
The Wednesday star expressed her enthusiasm for the opportunity in a formal statement. “My love for adidas is one that goes back years. It’s always had such a presence in sport, music and culture and continues to be an innovator in so many ways” she said. “Growing up for me it always had to be adidas sneakers and tees as the go-to, to this day so much of my wardrobe is made up of the iconic three stripes. I feel so honored to become a part of this legendary family of changemakers and be the face of its all-new label. Can’t wait to show you guys.”
Brian Grevy, adidas Executive Board Member, made it clear the apparel giant is ecstatic to her representing the three stripes. “At adidas, we are constantly looking at ways we can push the boundaries in both sport and culture, which is why it’s so exciting that we can announce Jenna Ortega has joined us, to launch our first new label in 50 years. A progressive and passionate next generation pioneer that is making waves across the globe, her fresh and creative way of thinking is what we, as a brand, found ourselves on and continue to be inspired by. We can’t wait to unveil what’s to come from this special partnership, very soon!”
Photo: adidas
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One of the culture’s most popular creatives is missing Kanye West. Jerry Lorenzo said that adidas isn’t the same, before quickly deleting the social media post. .
As spotted on High Snobiety the Sacramento, California native was out making moves while he was at Paris Fashion Week. Being at one of the industry’s most high-profile gatherings must have given him some nostalgia as he took to social media shortly after attending the Louis Vuitton Fall Winter 2023 show. “VIRG… paris ain’t the same without you” he wrote which was a nod to the late great Virgil Abloh; former menswear designer at the luxury label.
The message continued with “YE… adi ain’t the same without you. miss my dudes”. He closed out caption with a heart emoji. This post was short lived though as he deleted it after publishing it but not before it received over 200 comments and roughly 20,000 likes. It is not clear why he withdraw the Instagram post but many assume that showing any support towards Kanye will automatically deem that Jerry Lorenzo is in agreement with the rapper’s antisemitism and outlandish views.
While the critically acclaimed designer has yet to explain the post it should be noted that Lorenzo has a history of speaking his mind on touchy subjects. In the past he has called out other brands who he sees as jacking Fear Of God’s signature minimalistic approach to athleisure wear. Additionally back in 2016 he denounced both gay marriage and abortion saying “yes, i am against gay marriage as the word of God speaks against homosexuality.”
You can see the since-deleted post about Virgil and Kanye below.
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Pusha T is stepping back into the sneaker game teasing his new collaboration with adidas.
As per Sneaker News, the trapper turned rapper is making moves while at Paris Fashion Week. While on route to the “Twilight Reverie” showing Pusha T was spotted wearing some never before feet pieces. At first glance, the shoes look like your standard adidas Samba. But the sneaker is actually much more unique. The “THORN,” a nod to his last name Thornton, features his marque throughout the oversized leather tongue and heel counter. Additionally, this model also has the signature trefoil logo on the toe box.
This is not the first time the “Diet Coke” rapper has worked with the German sportswear giant. Back in 2014 he signed a deal that would not only make him a celebrity ambassador but also afforded him the opportunity to release exclusive sneakers. Throughout his tenure with adidas, he released plush versions of EQT Guidance ‘93, EQT Support Ultra Boost and Ozweego.
His most noteworthy pair was the “Bodega Baby” which featured prime knit construction with premium carp leather overlays, a Boost midsole for unparalleled comfort and premium “King Push” engraved metal lace locks.
You can see images of the “THORN” below.
Photo: Arnold Jerocki / Getty
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Source: Michael M. Santiago / Getty
The war over horizontal lines has officially commenced. The trademark infringement trial between adidas and Thom Browne is underway.
As per Hypebeast, the two apparel companies will fight it out over who can rightfully use stripes throughout the product universe. This week, the two labels presented their opening arguments in Manhattan’s Southern District Court.
Back in June 2021 the sneaker brand served the Allentown, Pennsylvania native and his team with a lawsuit claiming that their four stripe motifs are “confusingly similar iterations” of the adidas marks. In the original complaint, adidas says their signature three-stripe trademark, which is synonymous with their most iconic footwear releases, signify the “quality and reputation” of their company.
Thom Browne responded to the filing with their own countersuit saying the two brands play in “entirely separate markets, at vastly different price points, and are not competitors.” Additionally, Rodrigo Bazan, Browne’s CEO, further detailed their stance in an exclusive interview with WWD. “We believe we are right and we are confident in the outcome of the case, as we have acted honorably for all this time. They [Adidas] consented for 12 years and now they are changing their mind,” he said. His latter comment points to when the two labels put their differences aside and agreed to act in “good faith.”
adidas is seeking $867,225 in damages as well as more than seven million in what they estimated Thom Browne in profiting from selling pieces with similar stripes. Previously adidas has sued Payless Shoesource, Skechers, Forever 21, Nike and Tesla for similar infringement.