I dived into the interwebs and did a complete teardown to figure out what the real problem is with Ivy Park & why the collab didn’t work. Why were Adidas & Beyonce at odds? Is the problem that Beyonce just isn't wearing it enough, or does that actually matter?

I want to preface this completely objective piece of writing by saying I paid $1,500 for my wife to see Beyonce in concert this summer, so don't jump me.

Myth 1: Beyonce Isn't Wearing it Enough

Well, this isn't entirely false. Although thinking it's the reason they failed, isn’t quite right.

I catalogued every instance Beyonce used her Instagram account for Ivy Park related/tagged posts in 2022.

6 Times. And none after her album was released.

Beyonce is an elusive figure with an intentionally insolated life. That very thing can make it challenging to properly leverage her personality for the brand.

For someone developing an entirely new brand partnership, to be fair, you can argue 6 posts in a year, just isn't enough engagement.

But I'd argue that isn't the real problem. The problem is the lack of involvement in the overall content strategy. The impact of Beyonce posting a few more pictures of the products wouldn't have moved the needle. Because lets be real, it's 2023, you can't depend on celebrity Instagram posts to launch a sustainable, culturally relevant brand.

Ivy Park digital footprint after it’s early releases was mostly based on Instagram photoshoot drops, as if they had an already established and loyal base of buyers.

Myth 2: It's Sells Out, So it Must Be Doing Fine

It is very likely that atleast the last 4 Ivy Park releases have sold poorly.

Remember, Ivy Park missed Adidas own 2022 sales forecast by a crazy $210 million.

If Ivy Park is in fact selling out on their collections, than 1 of these 2 things is true:

1. The sales forecasting & marketing teams are miscommunicating on how many releases are actually happening & at what quantities.

OR

2. Adidas severely over estimated demand and is not selling inventory at the pace they anticipated, and is sunsetting the leftover inventory. I think this is the only logical conclusion.

Just because we see 'sold out' on the website, it doesn't represent all of the inventory that was produced & shipped to retail. Adidas wanted to maintain tight windows on dates of availability & the aura of exclusivity.

The quicker the perception of a sell out, the more FOMO (Fear of Missing Out) they can generate. But Ivy Park hasn't truly generated much FOMO for years. Ivy Park was typically only available for 2 days online, but many units were also shipped to retail & were left unsold in the months between releases.

Myth 3: They Shouldn't Have Only Sent The First Drop To Celebrities

I kept seeing this sentiment online that Ivy Park should have sent the original drop to Beyonce fans & not celebrities, and it's kind of funny to me because... sweetheart... this isn't a merch drop & you aren't really the focus. And, it's revisionist history because the first release strategy worked to absolute perfection.

The shipping of the initial release PR boxes in 2020 generated a massive amount of buzz, and an all time peak in Google interest for the brand. It was the type of internet culture moment that marketing strategists dream of.

The celebrity boxes did exactly what was intended for the release strategy, and that’s generate:

A. Mystery

B. Mystic

C. Aura of Exclusivity

But the things that created aura in the 1st drop, can't sustain aura for the next 6. And frankly, Ivy Park had a very temporary brand aura that wasn't developed on well. In fashion, the things that got you to $50 million, won't necessarily generate the momentum to scale you to $500 million.

Myth 4: Ivy Park Could've Been Bigger Than Yeezy & Fenty

I beg everybody to stop comparing Ivy Park to Yeezy or Fenty!

It's important to understand the different market factors on the playing field effecting outcomes for these 3 brands.

Ivy Park was never going to be the unicorn that Yeezy was, although Adidas desperately wanted it to be. I believe their point of reference for growing a celebrity brand was their partnership with Kanye.

The miscalculation comes in that, while Beyonce may have as much, if not more influence than Kanye; The personality + product fit led to totally different growth potential.

Yeezy peaked at an estimated $1.7 billion in revenue. It did not scale to this on the back of apparel, but rather sneakers. It's apparel division actually failed with Adidas. But sneakers on the other hand, have a multi decades long built in collector and resale culture. Sneaker culture has market dynamics that make the market much more penetrable.

- Rarity

- Scarcity

- Colorways

- Collectability

The sneaker resale market is valued at an estimated $6 billion globally. Nike, Jordan & Yeezy account for 90% of those sales. Yeezy also grew at the same time as the launches of shoe marketplaces like StockX, Stadium Goods & GOAT.

And considering hip-hops alignment with male dominant sneaker culture, Yeezy & Adidas had built in market fit, and an ideal economic environment.

Fenty Beauty's partnership structure with LVMH is much different than Adidas with Yeezy & Ivy Park. LVMH is a holding company that has controlling stakes in luxury brands like Tiffany & Co, Christian Dior, Marc Jacobs & Sephora.

Rihanna has a 50/50 partnership with LVMH, who distributes Fenty products through already owned retail channels like Sephora, as well on on fentybeauty.com (Ivy Park was never sold on it's own independent eCommerce Channel)

This structure allows Fenty to build an independent eCommerce identity, while LVMH is the production partner in the background.

The makeup market also aligns perfectly with Rihanna's public perception & influence. It also helps that she is extremely out front in the brand messaging & storytelling.

It's not hard to find videos of Rihanna doing her own makeup on behalf of the brand. You get invited into Rihanna’s world in a very organic way.

But, Fenty also had a fashion brand of ready to wear clothing that launched in 2019 but failed and shut down in 2021. LVMH said it would close down "pending better conditions", which I believe meant economic conditions.

Ivy Park Was Building While Consumer Confidence was Volatile

That just goes to show that even for celeb brands, its really hard to build a fashion collection in a recessionary, inflationary, pandemic economic environment between 2020-2023, Building an everyday fashion brand at higher price points is an uphill battle in this economic environment.

While I believe Ivy Park made enough missteps on the product side to fail even if their was not a pandemic, their is evidence Adidas dealt with a 2022 supply chain issue…

How The Adidas x Beyonce Partnership Worked

In Ivy Park's first launch partnership with Topshop, Parkwood Entertainment & Topshop held 50/50 joint ownership of the brand. After the falling out of that collaboration, Beyonce then owned Ivy Park outright.

With Adidas, her company had licensed the Ivy Park name & branding rights to Adidas so that it would be marketed, manufactured & distributed exclusively through Adidas.

Evidence of this is the report that "Adidas executives expected hundreds of millions of dollars in Ivy Park sales and promised Beyoncé guaranteed annual fees and creative control."

So why is Beyonce making money on the partnership & Adidas losing money?

Beyonce + Parkwood Entertainment (Ivy Parks holding company) gets regular licensing fee payments from Adidas, and likely a share of the annual revenue.

While Adidas on the other hand fronts an investment that covers distribution, ecommerce, product manufacturing & marketing costs. This would be why Parkwood Entertainment made $20 million on the deal in 2022, and Adidas lost $10 million. This was a similar deal structure to what Adidas had with Kanye.

ADIDAS MADE THE MISTAKES

Adidas forecasted that in 2022, Ivy Park would generate $250 million, and the 2023 forecast was $335 million. Instead it generated $40 million. That gap had me asking So. Many. Questions. We're the sales & distribution team projecting things not in alignment with the marketing team plan? At first, it wasn't making sense at all:

• They had a drop based sales strategy, with limited supply they would release on specific dates...

• They usually always supposedly sold out online on all their collections...

• And yet still undersold on their own projections by $210 million? Nothing was adding up.

Until it was also reported that "In five of the last six Ivy Park releases, roughly half of the merchandise that was produced went unsold." Evidence that this is probably factual can be found in that Adidas has an estimated $500 million in unsold, stashed Yeezy inventory.

Which suggests that, Adidas usually uses real time data to produce and stockpile heavy amounts of inventory to satisfy what it anticipates demand to be. Not an uncommon production strategy at all.

Simply put, Adidas heavily over-projected long term demand based on the performance of Ivy Park's first drops.

They didn't calculate for potential interest fatigue or the economic challenges of scaling to these revenues during a recessionary period. Ivy Park didn't capture the imagination of a base of buyers broadly enough to be able to scale to $300+ million in 4 years.

Ivy Park has been unable to establish itself in a way that lets buyers express identity, or become a consistent piece of a standard wardrobe for anyone outside of a core Beyonce fan.

Fashion brands that release regular collections have to be able to consistently capture a magic in the culture that evangelizes the brand on it's own. Ivy Park needed be creating ripple effects that would eventually reach a broader audience, so they aren't always dependent on hype.

If you release new collections every 6 months, you better be sure to have captured an ideal customer who is committed to making it a apart of their closet & evangelizing the brand.

At the outset, the core fandom of a celebrity brand can springboard the launch. But in order to make it to the revenue levels Adidas was aiming for, you need the ripple effects of a content strategy and product market fit to create momentum that fills the between time from drop to drop. Adidas had neither.

ADIDAS AGENGA

On top of this overpromise/under-deliver by Adidas, One of the core issues that brought the partnership to a close, is that Adidas & Beyonce's team did not agree on how to market the brand & label the products. But what did that mean?

Adidas was said to be pushing for more of it's own branding next to Ivy Park.

Adidas agenda for it's own brand in this partnership was leveraging Beyonce's influence to increase their market share among female buyers. 

In order to do that, they wanted their branding tightly associated with Ivy Parks at all times, even if it doesn't serve to benefit Ivy Park.

Adidas has correctly assumed for years that the sports pipeline traditionally relied on by them and their competitors does not work for reaching woman in mass.

Brands like Gatorade, Nike, Adidas & Under Armor have always been able to make big bets that they can influence lifetime sales conversion behavior from males through organized sports.

The problem is, what value can Adidas provide in helping Ivy Park in develop a brand that can consistently convert woman, if they struggle to convert woman?

Yeezy's footwear lines lifted the sales of Adidas 'Originals' line products. Adidas was looking for Ivy Park to produce a similar halo effect among woman, without actually building a brand identity for Ivy Park that woman care about.

I get the perception based on reviewing all the products they ever released, that while Adidas goal was to win with woman, the Ivy Park team wanted to be a non-gender specific line of clothing. And that created a difference in creative vision.

For years, while Adidas has been desperately trying to convince woman their brand is for them; brands like Gymshark actually feel like they are for them. Ivy Park, really didn’t know who it was for.

A Failure of Fashion & Identity Development

It’s fair that many of the pieces in Ivy Parks offering are not practical, functional or stylish enough to establish themselves as mainstays in a wardrobe. But in fashion, lack of practicality can be easily overcome with a strong aura & aesthetic, which Ivy Park had BOATLOADS of in it’s initial drops.

In reviewing all of their products, I can't figure out what their strength is.

It has extremely undefined positioning. In short it's too much going on!

They are a gender neutral; semi-luxury 'athleisure' brand, with a premium price point, partnering with a sports adjacent male dominant brand in Adidas, and they offer athletic wear, swimsuits, metallic outfits, leotards, casual wear AND shoes. It's. Too. Much. Happening. Here.

In fashion you either need to be able to set the trend, or consistently time releases on trend. Ivy Park was able to do neither.

They have no mainstays or core products. The difficulty of a fashion brand, is that if you don't get ahead of a fashion trend, or establish evergreen items in your line, you have to find product-market fit every 6 months if not sooner.

@Fromaerin brilliantly catalogued the fashion trends Ivy Park had borrowed from and pointed out that Ivy Park fits seemed to be consistently behind & based on 2018-2019 trends.

3 Keys To Relaunching Ivy Park

1. Tighten the selection and focus the product identity.

Because Ivy Park does so many things product wise, it feels like they do nothing. Their isn't a defined product real estate that is a core part of who they are.

They have so many different product categories cascading on top of each other and previous collections are usually fleeting and inaccessible.

They are trying to penetrate the broader fashion market with too many products that aren't creating fans.

By limiting the product selection, this is going to make the relaunch much more straight forward, requires less working capital, and focuses the attention of the public on a singular product experience. Lead with workout wear & bathing suits as the core products, cut everything else.

2. No more brand partnerships. Ivy Park must create an independent eCom experience free of Adidas branding.

It's time to establish a clear, owned, eCommerce experience on Ivypark.com. All future drops will have pre-order available in order to gage exact demand and build anticipation.

This eCommerce experience has to belong to Beyonce, and be uniquely Ivy Park. The eCommerce relaunch is about inviting people into a new world. The type of worlds that Beyonce builds in albums. We'll create landing page experiences for each product that takes people inside the story of each product.

Adidas & Ivy Park were often making it difficult for people to make buying decisions due to tight online availability and accessibility. Which would be fine if they consistently engaged with the digital market outside of photoshoot settings.

3. Reimagined content strategy

I'm not even sure how you launch a major celebrity fashion brand in the year 2020 and in none of the subsequent years ever execute on a consistent Tiktok content pipeline. In the past Ivy Park has underutilized Twitter, Youtube and Tiktok.

For brands that are looking to build an identity around exclusivity, content strategy doesn't mean you are always posting, it's just that when you do, you have something very pause worthy to say.

• On Tiktok, Ivy Park uses only high quality branded collection presentation content, no native content. This can work if you are storytelling in some capacity (Which is why their recent Instagram video with Ice Spice was their best performing asset in years). But their Tiktok presence might as well be non-existent. Adidas provided no resources here.

• On Twitter, Beyonce hasn’t used her Twitter for Ivy Park content in 3 years. Now I know she probably doesn’t like the app, but her word has big leverage there.

• On Youtube, that last piece of content where Beyonce is storytelling for the brand & leading the narrative with her voice, is from 2016. Find that here.

While Ivy Park had produced content in the past that was strong, their didn’t seem to be a full scale concept/infrastructure in place. They were disconnected from multiple touchpoints in their content strategy that slowly drifted them into being stale.

In closing, Beyonce/Adidas Stans: