Adidas Suffering Without Yeezy
Adidas’s sales are declining following the end of its successful partnership with Kanye West and the Yeezy brand. Adidas ended Yeezy in 2021 after 15 years of collaboration, and its performance is deteriorating without the popular and influential line.
Slipping sales and profits
Adidas saw revenue decrease 9% in the first six months of 2021, largely due to the loss of Yeezy. Its net income also dropped 26% year over year. Adidas attributed the declines specifically to “comparisons with the prior year period which included very strong contributions from the partnership with Kanye West.” Without Yeezy, Adidas’ lifestyle brands have struggled to generate enough traction and sales growth.
Reliance on key partnerships
Adidas’s performance highlights its reliance on partnerships and collaborations as key drivers of growth. While these partnerships achieved major success, they also pose risks when they end or underperform. Adidas is working to diversify its product portfolio but continues to see a large portion of sales from partnerships, including with celebrities, designers and sports leagues. The Yeezy exit leaves a void that will be difficult to fill.
Challenges regaining momentum
Adidas now faces significant challenges in regaining its momentum without Yeezy. It must invest heavily in new partnerships, reinvigorate existing lifestyle brands, launch compelling new products, and improve key markets like North America that have seen prolonged declines. The road ahead is complicated, and there are no guarantees Adidas can recapture its former growth without Yeezy, suggesting its dependence on partnerships has made it vulnerable.
Lessons for the future
The Yeezy partnership highlighted both the benefits of collaborations and dangers of overreliance on them. For Adidas and other companies, key lessons include diversifying revenue streams, building more sustainable brand equity, and ensuring business fundamentals can thrive even when key partnerships end. While partnerships will likely remain an important tool, they must be balanced and temporary rather than open-ended or integral to success. The fallout from Yeezy shows the risks of failing to learn these lessons.
