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Beyoncé’s clothing line with Adidas suffers from weak sales

Beyoncé’s fashion brand Ivy Park is not as profitable as Adidas was hoping. Kanye West's Yeezy streetwear line did much better for the sportswear giant.

Beyoncé fans are clamoring for tickets to her world tour, but the music superstar is having a harder time finding buyers for her line of inclusive streetwear.

Beyoncé’s fashion partnership with Adidas AG has produced weak sales of her Ivy Park clothing brand, according to documents and people familiar with the matter, leaving a roughly $200 million hole in the company’s annual projections. 

Sales of Ivy Park tumbled by more than 50% to about $40 million in 2022 — coming in below internal Adidas projections for $250 million in sales that year, documents reviewed by The Wall Street Journal show. The documents show Ivy Park has been losing money for Adidas and Beyoncé gets about $20 million in annual compensation.

The contract between the pop star, whose full name is Beyoncé Knowles-Carter, and the German sneaker giant is set to end after 2023. Adidas executives have discussed either ending or revamping the arrangement, the people said. 

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Adidas said the Ivy Park "partnership is strong and successful" and declined to discuss its financial performance. "We continue to be inspired by our collective vision and are proud of the work we have created together," the company said. Beyoncé’s spokeswoman did not respond to requests for comment.

The struggles of a brand backed by one of the world’s most successful music artists —who just set the record for most Grammy Awards and has nearly 300 million Instagram followers — shows the challenges with Adidas’s strategy to sell more streetwear and fashion sneakers by collaborating with celebrities such as Beyoncé, Pharrell Williams and Kanye "Ye" West. 

Adidas, a global sportswear seller with a roughly $30 billion market capitalization, lowered its earnings outlook in November after it cut ties with Ye following antisemitic comments by the rapper and workplace complaints involving him. Adidas had worked with Ye for years to build the Yeezy brand into one of its biggest sellers.

Beyoncé debuted the Ivy Park clothing line in 2016 in a partnership with Philip Green, the U.K. retail tycoon who used to own Topshop. The line initially featured running shorts, tank tops and hoodies for $35 to $60 along with higher-priced jackets and backpacks. Beyoncé bought full ownership of the brand in 2018. 

In 2019, Adidas announced its collaboration with Beyoncé, who at the time called it the "partnership of a lifetime." The company sought to diversify its portfolio with women and hoped to replicate the success that it had with Ye, who had crossed over from making music to selling sneakers. 

Adidas executives expected hundreds of millions of dollars in Ivy Park sales and promised Beyoncé guaranteed annual fees and creative control, the people familiar with the matter said. However, it soon became clear that Ivy Park collections were not gaining the traction that Yeezy products did. 

Ivy Park features inclusive sizing and gender-neutral styles. Along with neon-colored sweatsuits and sneakers, it also has dresses and accessories. Many of the Ivy Park products have failed to sell, the documents show. In five of the last six Ivy Park releases, roughly half of the merchandise that was produced went unsold, the documents show. 

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The next Ivy Park release, which Beyoncé unveiled in Dubai last month, is expected to go on sale this week, days after the Grammy Awards. The new items, including a basketball shoe, a camo sequin jacket and children’s clothes, range in price from $30 to $600.

Although Beyoncé has appeared in marketing campaigns for Ivy Park, she does not appear as often as Ye did in Adidas streetwear in paparazzi pictures. Adidas and Beyoncé's team have also disagreed over how to label and market the products, with Adidas pushing for more of its own branding, the people familiar with the matter said. 

Ivy Park sales were on track to hit about $40 million at the end of last year, down from $93 million in 2021, according to the documents. For 2023, the documents show Ivy Park sales are projected to reach $65 million, compared with an earlier Adidas target of reaching $335 million.

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Adidas was on track to lose at least $10 million on the partnership in 2022, according to the documents. Meanwhile, Beyoncé was slated to receive about $20 million in compensation, the same as previous years, the documents show. 

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