The Kicks You Wear, Vol. 270 — Decisions, decisions, decisions...🤷
Between Ivy Park and the leftover remnants of Yeezy, things are pretty rough for Adidas
Gooooood morning, folks! Welcome back to the Kicks You Wear. Thanks so much for rocking with me this morning. Appreciate you.
Y’all throwing Super Bowl parties this weekend? Also, am I invited? I make a mean crab dip. Hope you have a blast Sunday. I also hope the Eagles win. Go Birds.
Let’s rock.
Ivy Park’s struggles are real
Adidas has a pretty big decision coming up on Beyoncé’s Ivy Park brand at the end of 2023.
What’s new: Ivy Park’s sales are reportedly tanking in a massive way, according to the Wall Street Journal, and the deal is set to expire at the end of the year.
The brand’s sales reportedly dipped by a bit more than 50% in 2022, dropping to $40 million from $93 million in 2021.
The sales projections for 2022 were originally at $250 million, which is over $200 million from the $40 million where they actually fell.
The numbers get bleaker in 2023, where projected sales are only anticipated to reach $65 million for the year.
The issue: This is not where Adidas anticipated Ivy Park would be by 2023. It was supposed to be Adidas’ next Yeezy — something it needs now more than ever.
Instead, the brand is losing ground in sales while Beyoncé is reportedly netting about $20 million annually from her partnership with Adidas. It’s hard to reconcile that.
Let me be clear: It’s not Beyoncé’s fault that Adidas gave her the deal they did. She should take that money 12 times out of 10. Instead, these numbers are a result of Adidas making massive miscalculations of what Ivy Park could potentially be.
It was a bet that a music mogul like Beyoncé could become a fashion mogul in the same way Kanye West did. But those two people are not the same.
Beyoncé wears Ivy Park, yes. But she’s always been more laissez-faire when it comes to marketing her clothing brand. That’s largely left up to Adidas. Kanye parroted Yeezy wherever he could whenever he could. Music was secondary.
Plus, Yeezy’s focus was mainly on footwear. Ivy Park’s is more sprawled and leans toward apparel — and that apparel has gotten plenty expensive, by the way.
You add all that together and that’s a recipe for waning interest. I mean, there was an Ivy Park launch on Thursday and nobody heard a peep about it. The only thing Beyoncé related that folks are talking about right now is how Ticketmaster sucks.
So here we are: Adidas has a decision to make. The choices are to either keep Ivy Park going in a different, more focused way, or let it drop completely.
I would love to see this continue. Beyoncé is, well, Beyoncé. We don’t have enough women in the culture doing the things she’s doing. That’s why she’s so important.
With that being said: Adidas needs a reset. They’ve been way too dependent on celebrities over the last decade instead of leaning on their core pieces like they used to do with, say, the Ultra Boost.
Remember when Kanye performed in plain white Ultra Boost 1.0s? Simpler times, man. Simpler times.
The bottom line: Adidas should prioritize recapturing that vibe. That way they’d have a stronger foundation for celebrity influencers to stand on so it’s easier for someone like Beyoncé to exist in this ecosystem without doing the heavy lifting.
It also prevents brands from being beholden to those celebrity influencers like Adidas was for so long with Kanye. Speaking of…
No Yeezy, So many problems
There’s no question that Adidas did the right thing, morally, by cutting ties with Kanye West. There’s also no question that the brand is hurting as a result.
The problem: Adidas could see an operating profit loss of around $750 billion, according to its latest 2023 financial overview. The brand needs to come up with a legitimate solution for the $500 million worth of deadstock Yeezys chilling in Adidas’ inventory.
The details:
The brand is currently conducting a strategic review to figure out what it could do with its Yeezy product. They’re anticipating the review will cost about $214 million.
Should Adidas decide to not repurpose its Yeezy inventory, it would lead to a write-off that drops profit by around $537 million.
That decision would also lead to a $1.29 billion dip in revenue for the year.
The solution: There isn’t an easy one. Selling it could potentially result in a lawsuit. Just taking the L and destroying the inventory might actually be the best option here.
Yes, the losses would be massive. But you avoid a long, drawn-out legal fight with West which is exactly what Adidas doesn’t need right now.
You also avoid upsetting folks. There are no Yeezy stans complaining about the brand sullying Kanye’s name by selling Yeezy with no Ye.
Adidas has a market cap of about $25 billion. That sort of loss would be historic, but it’s one the brand should recover from. It’ll take a while, sure. But they’ll be OK.
This is what happens when a brand depends so heavily on someone so volatile. Yeezy became more important than Adidas. Kanye’s brand became the company’s foundation. That’s a recipe for disaster and that’s why we’re here.
The bottom line: Get that foundation together and this won’t happen again.
I know you’re tired of luxury sneakers, but…
This is becoming a major theme of 2023. The meld between luxury and sneaker culture continues to meld together.
What’s new: Puma is apparently collaborating with Balmain on a luxury basketball shoe, per Nice Kicks.
This doesn’t seem to be something that will be widely released or available to the public, but it’s still so fascinating because it simply exists.
Luxury isn’t necessarily new territory for Puma. They’ve done work with Alexander Mattiussi before, for example. And Balmain has also worked with everyman brands like Pokémon before.
But Balmain hasn’t dipped its toes into the sneaker world quite yet outside of its own footwear. Especially not in the sports space.
What’s most interesting to me: When does luxury stop being luxury? Exclusivity is what these brands live off of, just as they do in the sneaker world. But luxury brands like Balmain lose high-end customers when their goods become less exclusive.
Yet, this keeps happening. We see it here, we see it with the Tiffany Nikes, and we see it with so much more. All in an effort for these luxury brands to gain new, younger audiences.
Is it worth it? That’s what we’ll find out soon enough.
The Michael Jordan movie that…isn’t about Michael Jordan?
The trailer for “AIR,” the movie about how Nike coaxed Michael Jordan into joining the brand, dropped on Friday. And, I’ve got to say, I’m impressed. This might be the whitest retelling of the story of Michael Jordan and Nike ever.
MJ isn’t even in this movie!
Using Michael Jordan as this…invisible Macguffin is a really interesting strategy. Also Matt Damon as Sonny Vaccaro is definitely a choice. Lots of weird stuff happening here.
With that being said, I don’t think it’ll be bad! Just kind of weird. I’ll be going to see this I’m writing a review for you. Can’t say I don’t love y’all, man.
#TheKicksWeWear
LET’S GOOOOOOOOO
First, the homie Ryan came through with these sweet Vomero 5s. This colorway with that aged sole? Sheeesh, man.
Then the homie Didspeak popped out in the South Beaches. Shouts to LeBron for breaking the scoring record.
After that, the homie Kyle come through in the Pure Platinum Dunks and WOW these look expensive.
The homie SJ came through stuntin in the Patent Breds. These joints NEVER get old man.
Speaking of expensive, the homie Elga popped out in the CDG Foamposites. Penny 4 eva.
My dog Preet was repping for the Birds this weekend in these sweet Dunks. Fly Eagles Fly.
Then the homie Andrew came through and brought us home with the Union AJ2. BEAUTIFUL.
SMOKED it y’all. Sheesh.
Thank you so much for rocking with me today. Appreciate you. Have a blast this weekend. Remember, KYW is out on Monday. I’ll be back next Friday though.
Let’s chat then. Until next time, peace and love. Be easy, be safe, be kind. And we out.
-Sykes 💯
What I think is wild about the Ivy Park stuff is that the materials are standard run of the mill adidas materials. If you feel the inside of a sweatshirt from Nike vs a sweatshirt from adidas - Nike is comfy, cozy, soft, and adidas is... well... stiff and basic. All the Ivy Park stuff uses those same standard issue not nice lux feeling materials. Ivy Park should feel like an elevation and justify the higher price points. Instead it literally just utilizes standard issue adidas with a "designery" spin. I personally don't like the feel of it on my body. I never feel excited to wear adidas stuff and in turn the Ivy Park stuff that I own.
They've got Beyonce who doesn't market her product (and has no incentive to market it either - she's making $$ regardless) and it's never really blown me away from a quality stand point. I know we say she should just get her bag, but like... if I had a brand I wouldn't want it to do shit sales just because I was making money no matter what. Like... she could try. But... that's just me.