Brand Strategy

What’s next for Adidas?

Marketers weigh in on where the brand can go after ending its collaborations with artists Ye and Beyoncé.
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Illustration: Francis Scialabba, Photo: Adidas

· 5 min read

In Adidas’s earnings report, CEO Bjørn Gulden was quick to point out the obvious, noting that “the loss of Yeezy is of course hurting” the company.

During the quarter, Adidas said that the closure of its Yeezy line caused a sales hit to the tune of €400 million when compared to the previous year. Overall, the company’s sales fell 1% year over year last quarter, though footwear revenue grew 1%.

Under Gulden, who joined Adidas from Puma earlier this year, it seems marketing will play a crucial role: In March, Gulden said he would replace the company’s departing global head of global brands himself (its head of global marketing also left earlier this year). Gulden has said he intends to build brand awareness as part of a goal to return the company to profitable growth next year.

Part of this will presumably involve charting new partnerships for Adidas after it cut ties with two of its most high-profile celebrity partners. In October, the company terminated its relationship with rapper Ye and his Yeezy line after he made several antisemitic remarks. Investors recently filed a lawsuit against the company, claiming it knew Ye’s behavior could harm the brand but didn’t tell shareholders.

Ye “is and has been a loose cannon for quite a while, and he’s definitely shown that with his recent behavior, so Adidas having tolerated it for quite a long time and not screening him properly, initially, has gotten them into the position that they are,” Thilo Kunkel, an associate professor of marketing and sport management at Temple University, told us.

Adidas also recently parted ways with Beyoncé’s Ivy Park, which was slated to make $250 million last year, according to internal company documents seen by the Wall Street Journal; it ended up making around $40 million. Hannah Hickman, partner and head of the youth culture practice at consulting firm sparks & honey, told us Ivy Park may have suffered from a lack of differentiation. “From what I read and saw from consumers, there wasn’t really enough that was different about Ivy Park to necessitate the higher price tag,” she said.

Thank you, next

As the company moves on from these partnerships, it’s inking new ones, some of which seem targeted toward Gen Z. In February, it debuted its first new line in 50 years, Adidas Sportswear, naming Wednesday star Jenna Ortega as the face of the label.

“When you look at the demographic of Kanye and Beyonce, it probably does skew a little bit older than some of the newer artists coming up,” Bob Lynch, founder and CEO of sports intelligence platform SponsorUnited, explained. “This is probably a really good opportunity for them to do a reset and start to invest in sort of the next generation of creators and artists that are out there.”

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He pointed out that these sorts of partnerships could help the brand on TikTok as well, one of Gen Z’s favorite platforms. “Kanye West or Beyoncé are not going to be the most popular, most engaged from a TikTok standpoint,” he said.

According to SponsorUnited, the brand has worked with 62 celebrities or influencers over the past year, including model Bella Hadid, actor Terry Crews, and musician Bad Bunny. Of endorsers who had at least 1 million followers and five posts, soccer players Jude Bellingham, Son Heung-min, and Tatiana Flores provided the highest engagement on social media for the brand, per SponsorUnited’s analysis.

Inspo?

Adidas execs have said they plan to prioritize sports and athlete partnerships in the future as the company tries to rebound.

Kunkel noted that brands like Lululemon have focused on building relationships with microinfluencers within different communities, like yoga.

“They’ve really focused on their creators and their community creators,” Kunkel said. “They’ve been really focusing on the yoga community. So if you’re a yoga instructor…you are a Lululemon ambassador.”

While Adidas is no stranger to partnerships, Hickman pointed to the one between Crocs and Balenciaga as an example of the sort of collaboration that can appeal to younger audiences.

“Another way for them to think about partnerships is, ‘How are we going to tap into the unexpected, the random?’” she said. “I think we’re in an era of celeb brand matchups that is yielding a lot of excitement from Gen Z.”

Hickman also mentioned the recent partnership between Puma and New York City’s Russ & Daughters as an example of what this can look like. “That’s such a genius collab,” she said. “It feels really fun. It feels very fresh and young. They’re not taking themselves too seriously.”

When asked what Adidas could learn from Nike, Kunkel said the latter has a wealth of storytelling experience.

“I think Nike has a few decades of advantages in that regard, as we’ve seen with Jordan,” Kunkel said. “They’ve worked with individuals extensively and built a lot of products around individuals over a long period of time. What Nike has done really well is working [with] and leveraging the individual superstar.”

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