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It’s the End of an Era: Beyoncé and Adidasthe second largest sportswear brand in the world, they mutually agree to part ways. Ivy Park sales fell more than 50% to $40 million in 2022, Much less than the 250 million projected by Adidas. This has led investors to warn about earnings as the brand tries to climb out of the billion dollar hole and focus on core products.
The breakdown you need to know:
CultureBanx She mentioned that Adidas’ main problem has been its strategy in recent years, which has centered on partnerships with other artists, such as Bad Bunny, Pharell Williams, and Rapp Ye (aka Kanye West). Only one of those consortia has consistently met or exceeded its financial projections.
Specifically for Ivy Park, revenue was $93 million in 2021, and in 2022 revenue was $40 million versus the expected $250 million. In 2023, revenue is expected to reach $65 million, far from the target of $335 million, according to Wall Street Journal. Adidas’ contract with Beyoncé pays her $20 million a year and was due to expire at the end of this year.
Glacier Association:
“Adidas has all the ingredients to be successful, but we need to refocus on our core: producer, consumers, retail partners, and athletes.” Bjørn Gulden, CEO of Adidas, stated on his earnings call in early March.
There were significant creative differences between Ivy Park, Adidas, and Beyoncé, according to Hollywood Reporter. Perhaps for this reason, the CEO of Adidas declared that athletes, not artists, should be the center of attention.
Overall, though, it’s been a tough ride for the athletic apparel and shoe company. which expects an operating loss of 700 million euros in 2023. This will be Adidas’ first annual loss in 31 years.
situational awareness
Let’s not forget that Adidas has $750 million worth of Yeezy brand inventory that it may never sell after splitting from Ye. Earlier this month, the company reported a large fourth-quarter loss and slashed its dividend after its costly partnership with Ye’s Yeezy brand ended in October 2022.
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