This post was originally published on this site
The Wall Street Journal reported in an exclusive story on Wednesday that musical superstar Beyonce is having a difficult time converting her fame on stage to sales of her Ivy Park clothing brand.
The Grammy winner partnered with Adidas (OTC:ADDYY) in 2019 to relaunch her inclusive athleisure clothing brand. However, the partnership has produced weak sales, leaving a roughly $200 million hole in the company’s annual projections.
According to documents recovered by WSJ, and people familiar with the matter, sales of Ivy Park tumbled by more than 50% to about $40M in 2022—coming in below internal Adidas projections for $250M in sales that year. The documents show Ivy Park has been losing money for Adidas and Beyoncé gets about $20M in annual compensation.
The contract between Beyonce and the German sneaker giant is set to end after 2023, and Adidas executives have discussed either ending or revamping the arrangement.
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. But it soon became clear that Ivy Park collections weren’t gaining the traction that was expected. According to documents, in five of the last six Ivy Park releases, roughly half of the merchandise that was produced went unsold. The next Ivy Park release, which Beyoncé unveiled in Dubai last month, is expected to go on sale this week.
Adidas was on track to lose at least $10M on the partnership in 2022, according to the documents. Meanwhile, Beyoncé was slated to receive about $20M in compensation, the same as previous years.
