Adidas Signs Beyoncé as “Creative Partner” with Women’s Footwear, Activewear Markets Growing

Beyonce

Beyoncé Knowles has signed a long-term deal to serve as a “creative partner” to Adidas. The star singer will collaborate with the brand on “new signature footwear and apparel” across both the performance and consumer lifestyle categories. The multi-layer partnership will also see Adidas help Knowles relaunch her Ivy Park athleisure brand. Financial terms of the agreement were not disclosed.

Howie Long-Short: NPD Group’s Matt Powell wrote last July that the “paid endorser model is simply broken”; that the U.S. consumer had wised up to the pay-to-wear sponsorship model, realizing that celebrities/athletes “will endorse whatever they are paid to wear.” So, high-profile partnerships, like this one, should always be looked at with a sense of skepticism on the brand side. Beyoncé will have a larger role though than just endorsing Adidas; she’ll be involved in the creative process. That should help in projecting authenticity, which will enable the brand to better connect with its consumer, but it is no guarantee of success. Remember, the “Kanye effect” was a myth until a recent increase in distribution “led to unexpected gains” for ADDYY.

Back in September ‘18, we noted that sneaker/apparel brands were failing to earn returns on their investments in American athletes (note: there wasn’t a single performance shoe or signature sneaker in the Top 10 sold in ’18), so it makes sense that those companies are looking for influencers outside of sports. To date, most of these deals have managed to generate buzz, but few have found commercial success – at least in part because the collaborations are typically limited to artificially create demand (see: Kanye Effect). There is precedent for success, though. Rihanna joined Puma (in ’14, she’s since left) as a creative director and global ambassador to the brand and was able to almost immediately contribute to its top line growth.

Without the numbers, it’s impossible to gauge if Beyoncé will ever be able to sell enough shoes/merchandise to make the math work, but Adidas was wise to align with the female artist. Women have been historically underserved by sports brands, so there’s a tremendous opportunity in the marketplace relative to the men’s side; significant revenue growth is anticipated within both the female footwear (CAGR of 4.2% through ‘27) and the female activewear markets (CAGR of 7.7% through ’25) over the next half decade. The rise of the health-conscious, sports and fitness enthusiast is driving sales.

As for Knowles, it truly is “a partnership of a lifetime.” She likely landed a massive pay day and the Adidas marketing machine will expand her athleisure business “on a truly global scale”, while she gets to retain sole ownership of the company (she bought out TopShop in ’18). There’s no downside for her.

Fan Marino: ESPN’s Nick DePaula recently said on an episode of “The Jump” that Beyoncé had been in talks with Reebok about a similar partnership, but the company’s lack of diversity drove her to end conversations; Reebok has denied those claims. Under Armour and Jordan Brand also reportedly had interest in the singer.

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Author: John Wall Street

At the intersection of sports & finance.

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