Adidas and Kanye West: A Success Story Turned Sour
Kanye West is one of the most influential and controversial figures in the music and fashion industry. West is known for his innovative and creative style, as well as his outspoken and sometimes erratic behavior. He has also been a major player in the sneaker market. He has collaborated with various brands such as Nike, Louis Vuitton, and most notably, Adidas.
Adidas, the German powerhouse, has been in business since 1924. It is one of the largest and most successful brands in the world, competing with rivals such as Nike, Reebok, and Puma. Adidas already had a long history of partnering with celebrities and athletes. Product lines with David Beckham, Lionel Messi, Jeremy Scott, Missy Elliott, Yohji Yamamoto, and Pharrell Williams.
The partnership between Kanye West and Adidas began in 2013. West had just announced that he was leaving Nike after a dispute over royalties and creative control. He claimed that Nike was not respecting his vision and was limiting his potential. He also said that he wanted to make shoes for the masses, not just for collectors.
West then signed a deal with Adidas. That move gave him more freedom and support to create his own line of sneakers and apparel. The deal was reportedly worth $10 million, plus royalties and incentives. West said that he chose Adidas because he admired their heritage and innovation. And adidas was willing to take risks with him.
The First Drop
The first product of the Yeezy collaboration was the Yeezy Boost 750. The high-top sneaker featured a suede upper, a strap across the laces, and a Boost sole. The shoe was released in February 2015, in limited quantities and at a retail price of $350. The shoe sold out within minutes and resold for thousands of dollars on the secondary market.
The Rise
The success of the Yeezy Boost 750 was followed by several other models. The most notable styles were the Yeezy Boost 350, the Yeezy 350v2, the Yeezy Boost 700, the Calabasas, and the Yeezy Foam Runner. Each shoe had its own distinctive design and colorway, and each generated huge hype and demand among sneaker enthusiasts and fans of West.
The collaboration also expanded to include clothing, accessories, and jewelry. In the Fall of 2015, West debuted his first fashion collection with Adidas, called Yeezy Season 1. The collection featured oversized and distressed pieces in neutral tones, inspired by military and streetwear aesthetics. The collection received mixed reviews from critics and consumers, but it also attracted attention from celebrities and influencers.
West continued to release more collections with Adidas, each with its own theme and style. Some of the notable collections were Yeezy Season 3, which was presented at Madison Square Garden during West’s album launch event. The Yeezy Season 5, which featured camouflage prints and denim. The Yeezy Season 6, which used social media models to promote the clothes.
The partnership between Kanye West and Adidas was widely regarded as one of the most successful and influential collaborations in the history of fashion and sneakers. According to Forbes magazine, West’s Yeezy brand was valued at $1.5 billion in 2019, making him one of the richest celebrities in the world. Adidas also benefited from the partnership, as it boosted its sales, reputation, and market share.
The MAGA Season
However, the partnership also faced some challenges and controversies along the way. One of them was West’s erratic behavior and controversial statements, which sometimes alienated his fans and customers. For example, in 2016, West went on a rant during a concert in Sacramento, where he criticized Beyoncé, Jay-Z, Drake, Hillary Clinton, Barack Obama, Mark Zuckerberg, and others. He also said that he would have voted for Donald Trump if he had voted in the presidential election.
Another example was in 2018 when West appeared on TMZ Live. In one of his worst public moments, he said that slavery was “a choice” for African Americans. He also showed his support for Trump by wearing a “Make America Great Again” hat and meeting with him at the White House. These actions sparked outrage and criticism from many people, especially from the black community.
These incidents affected West’s image and reputation as a creative genius and a cultural icon. They also affected his relationship with Adidas. The brand faced pressure from some consumers and activists to drop him as a partner. However, Adidas decided to stick with West despite the controversies.
The Break Up
In 2022, Adidas announced that it would not renew its contract with West, which expired at the end of the year. The brand did not disclose the reason for the split. But some speculated that it was due to West’s controversial political views, erratic behavior, and declining popularity. West also expressed his dissatisfaction with Adidas on several occasions, claiming that they didn’t give him enough creative freedom and control over his brand.
The end of the partnership had a significant impact on Adidas‘ financial performance and brand image. According to the adidas Annual Report 2022, the company’s net sales increased by 6% to €22,511 million in 2022, compared to €21,234 million in 2021. Despite that, the gross margin declined by 3.4 percentage points to 47,3%, while the operating margin dropped to 3%. The net income from continuing operations plummeted by 83% to €254 million in 2022, from €1,492 million in 2021.
One of the main factors that contributed to the decline was the loss of revenue from Yeezy products, which accounted for a significant share of Adidas‘ sales in previous years. According to Business Insider, Yeezy sales reached $1.3 billion in 2019, representing about 5.5% of Adidas’ total revenue that year. Without Yeezy, Adidas lost a major source of growth and differentiation in the competitive sportswear market.
The Yeezy Factor
Another factor that affected Adidas’ financial performance was the damage to its brand image and reputation after ending its partnership with West. Although West was a controversial figure, he also had a loyal fan base and a strong influence on fashion trends and culture. Many consumers who admired West and his style were disappointed and angry with Adidas’ decision, and some even boycotted the brand or switched to other competitors. Adidas also faced criticism from some industry experts and analysts, who questioned the company’s strategy and vision for the future.
In conclusion, Adidas suffered significant financial damages after ending its partnership with Kanye West in 2022. The company lost a valuable source of revenue and growth, as well as a powerful brand ambassador and innovator. The decision also harmed Adidas’ brand image and loyalty among some consumers and stakeholders. Adidas will need to find new ways to recover from this setback and regain its competitive edge in the sportswear market.
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