Newsonyx

Athletic brand Adidas took a substantial financial hit due to their partnership with Beyoncé’s Ivy Park clothing brand after 2022; sales were approximately $40 million instead of the $250 million the company projected for the same year.

According to documents obtained by The Wall Street Journal, Ivy Park hasn’t led the nearly $30 billion company to gain revenue. Adidas took a $200 million hit in 2022, which isn’t solely on Ivy Park but also because the company severed ties with rapper Kanye “Ye” West’s Yeezy brand the same year due to alleged antisemitic remarks.

Beyoncé will still get her annual $20 million check despite Adidas’ substantial financial loss. However, the German shoe brand’s executives are deciding whether to end or refurbish the partnership.

But an unnamed employee said the “partnership is strong and successful” without discussing the financial aspect, adding, “We continue to be inspired by our collective vision and are proud of the work we have created together.”

According to WSJ, what harmed the partnership was that nearly half of Ivy Park’s merchandise produced (five of the last six releases) weren’t sold, which caused Adidas to lose money rather than gain.

And it was said that the shoe giant and Ivy Park struggled to agree on ways to label and market Ivy Park’s products, “with Adidas pushing for more of its own branding.”

However, according to a 2019 New York Times report, less than 8% of Adidas’ employees were Black, and some of those Black employees revealed to the outlet that the shoe company’s marketing tries to appeal to Blacks, yet disregards Black employees’ input on how to market to their own. They also said the brand promotes diversity in the public eye, but it’s not that way in the company, having over half of the employees being majority white.

Additionally, Adidas used the same marketing strategy for Yeezys on Ivy Park — scarcity. Adidas’ marketing team believes driving the prices up on “scarce” products will cause consumers to blow their wallets. But Beyoncé fans are different, and many see the designs as “tacky.”

On the same note, Beyoncé is rarely seen wearing Ivy Park in public, unlike West did with Yeezys. So, it’s not a good look if the “face” of the brand doesn’t wear the advertised product. It could be because the “Halo” singer didn’t have a say in the design. Last year, West called

out the brand for making design decisions without his approval.

Since sales haven’t been up to par (2021 sales were $93 million), Adidas had to be realistic about 2023 sales, bringing their estimation from $335 million to $65 million.