As part of its strategy to pivot away from its disastrous deal with Kanye West, Adidas says it will be refocusing on sports.
“We want to double down on all of the things that are U.S.-centric, particularly around sport,” Rupert Campbell, Adidas’ North American President, told the Wall Street Journal about the sportswear company’s strategy shift. The German company officially terminated a lucrative partnership with the rapper in October 2022 over a tirade of unhinged, antisemitic remarks made in public.
Now the company wants to focus on rebuilding its reputation as a sports brand. It has opened a new facility in Los Angeles where it will base its new basketball product team. It has also upgraded its main U.S. hub in Portland, Oregon. Adidas will open more U.S. stores and will seek to forge new partnerships with U.S. athletes, with a renewed focus on Major League Soccer.
High-profile celebrity ventures just haven’t paid off for the company. Adidas says it expects to incur a $749 million loss writing off Yeezy merchandise. Sales of Yeezy merchandise was estimated to account for 8% of Adidas annual revenue by some estimates—leaving Adidas in the red for the first time in 30 years without those sales. But the Yeezy partnership isn’t the only celebrity venture that flopped hard.
Adidas and Beyoncé mutually decided to end their Ivy Park collaboration in 2023. Reports suggest that’s because sales of the celebrity-endorsed clothing line didn’t meet expectations. Meanwhile, the collaboration with Pharrell William’s Humanrace fashion label saw sales plummet 70% compared to their peak five years earlier. Adidas says it will continue to pursue celebrity partnerships like these but that sports are now front and center focus for the company’s U.S. business.
Adidas aims for its new Los Angeles location to be a place where its team can gather “real-time insights from a diverse consumer base.” It will also work closely with grass roots programs like Los Angeles pro-am basketball competition Drew League. This team will also be responsible for managing new celebrity collaborations going forward.