Yo,
I meant to send this one out a few weeks back but thought there were some more interesting things to write about each week, so held it until now. Not to say it’s not interesting, just short, and breezy.
Adidas just got dumped, but this time it was mutual
A few weeks ago, Adidas and Beyonce announced that they were parting ways after years of partnership they were splitting up. This comes after their latest collab, Ivy Park, flopped in a major way – down $43 million compared to previous years.
This split leaves Beyonce primed to pick up another endorsement before her world tour, and Adidas wondering where they went wrong when it came celebrity endorsements.
Adidas has been serial dating
If you’re sitting, there wondering “haven’t I heard this before?” You have. Adidas had the whole dilemma with Kanye earlier this year leading them to split ways and essentially burn all of their Yeezy inventory.
But contrary to Beyonce’s line, Yeezy brought in between $1-2 billion a year.
So, is it just bad timing?
Eh, I’m not sure. I mean it’s hard to predict that one of their key partners would go completely off the reservation, and that the most famous female hip-hop artist wouldn’t be able to sell her line.
But then when you look at their endorsement deals, their celebrities seem to fall flat. Adidas’ next biggest endorsers are Pharrell Williams and Donald Glover, who are nowhere near where they were peak fame (in my opinion).
Compare that to Nike’s Drake, Billie Eilish and others who show no sign of slowing down, and maybe it is Adidas’ failure to sign big celebrities.
Performance issues
In the world of activewear, or just clothes in general, endorsement deals, and partnerships are everything. They can make up over 50% of a company’s revenue.
And it adds up. Again, think about Nike with Lebron, KD, Jordan, Tiger Woods, Ronaldo, and Nadal; and compare that to Adidas with who…. Derek Rose (another unpredictable flop)?
All this information, just helps add context to this chart, confirming that Adidas may be in some trouble.
There’s another school of thought
There is another brand that has somewhat burst onto the scene, and takes a different approach. Instead of partnering with huge personalities, Lululemon seems to be focusing more on niche internet influencers.
With their limited products (i.e. they don’t sell sport specific shoes, etc.) they kinda have to. But it’s working, their revenue seems to be hockey-sticking.
Not to mention, people genuinely think their brand is of higher quality.
Minted New York
Speaking of apparel, and more specifically quality. One of my favorite current entrepreneurs is Marcus Millione of Minted New York. Starting off selling jewelry, scaling to apparel, to doing a shoe collaboration with Saucony all in a few years, his story has been impressive. What more impressive, are his products. Nearly every drop sells out, and Minted never sacrifices quality. Go check them out if you’re looking for running gear or a hoodie that will last you a lifetime. Better yet, give him a follow on Twitter, because he’s doing it all in public. #ad
Final thoughts
I think it’s a little bit of both for Adidas.
They’ve got to be the unluckiest brand when it comes to endorsement deals, and most of that has been unpredictable. But they also don’t appear to be targeting the big players or changing their strategy at all.
If I were them, I would potentially overpay for an endorsement of an already established celebrity just to stop the bleeding for a bit.
And if they don’t I could see Lululemon surpassing Adidas, and Adidas becoming the next Under Armour (completely irrelevant).
Let’s have ourselves a weekend.
from, matt
