Adidas and Beyonce have ended their partnership for their Ivy Park collaboration due to sluggish sales.
The Hollywood Reporter says that the partnership is ending despite upcoming Ivy Park collections that are planned for release this year. Earlier this year, the German company held talks with the singer on whether to renew an agreement that expired this year. Both parties mutually agreed not to extend the partnership after sales of the Ivy Park brand fell more than 50% in 2022.
According to The Wall Street Journal, Beyonce receives around $20 million a year in compensation as part of that deal. But the Ivy Park collection has been losing money for Adidas for some time as Beyonce moves her attention to more luxury-focused brands. She recently unveiled a new couture collection designed in collaboration with Balmain. That collection features looks that are inspired by her recent album Renaissance.
The superstar first launched her Ivy Park clothing line in 2016. Adidas announced a deal with Beyonce in 2019, hoping to capture lightning in a bottle again after its Yeezy partnership. The WSJ reports that much of the merchandise produced for the collection didn’t sell, however. Sales were only $40 million in 2022, well below Adidas’ internal projections of $250 million for that year. It’s also well below the $93 million sales figure for 2021, suggesting a decline in interest for the collaboration.
Adidas has been left in free fall following the fall-out of its partnership with Kanye West. West made a slough of antisemitic comments and engaged in erratic behavior that forced the company to cut ties with him. At this point, Adidas is still deciding what it will do with the unsold Yeezy inventory. Looks like Adidas can add the rest of the Ivy Park collaboration to that big question mark box.
The company says it will suffer its first annual operating loss in over three decades due to the collapse of the Yeezy collaboration. It will write-off its entire Yeezy-branded clothing line, representing a potential $500 million loss for the company’s bottom line. CEO Bjørn Gulden says Adidas has received over 500 offers to buy the existing stock, but it’s not sure that’s the right thing to do.
“I think the goal that we have is to do what damages us the least, and that we do something good,” Gulden said in an interview with analysts earlier this month.