Can Kanye West Save Adidas?

adidas, the iconic sports apparel and sneaker company has lost significant market share and muddled its image with consumers. Its latest push into hip-hop fashion has some analysts wondering whether it can ever outrun Nike again. On a Thursday night in February, Jay Z, Beyoncé, Rihanna, Sean (“Puff Daddy”) Combs, Vogue editor Anna Wintour—“and no fewer than six Kardashians,” by the New York Post’s count—squeezed elbow to elbow into a SoHo event space to see Kanye West debut his “Kanye West x Adidas Originals Yeezy Season 1” collection. As a lone trumpet solemnly blared, 45 models marched out in a mélange of blousy sweatshirts, bomber jackets, and flesh-toned bodysuits. The buzz wasn’t about the clothes, though. Hardly. It was about the sneakers.

The rapper followed his models on the catwalk sporting a pair: gray suede high-tops that fell somewhere on the fashion spectrum between mukluks and moon boots. These were the new Yeezy Boost, rumors (and sightings) of which had swirled around the web for months. When the shoe, priced at $350 a pair, finally went on sale online days later, the first run of 9,000 sold out within minutes. You can now find them on eBay selling for as much as $7,000.

“This was an Adidas weekend,” Herbert Hainer, the longtime CEO of the German sports apparel company, declares in a sprawling interview with Fortune at the company’s home base in Herzogenaurach. “It was all about Adidas.” Brand chief Eric Liedtke, an American who works at the headquarters in Germany, is more gushing (if less family-friendly): “We had no right beating Nike on that. But we’re getting our shit together, that’s why.”

Speaking of Nike, the sportswear giant, with its namesake brand, Air Jordans, and Converse, has scooped up a nearly 50% share of the U.S. athletic footwear market. Adidas Group’s slice is a mere 9% and has declined every year since 2011. To be sure, Adidas still dominates the sport that dominates much of the earth. Its share of the global soccer market is an estimated 39%. But here, too, Nike is closing in fast. A warning shot if ever there was one: Nike’s sales in Western Europe, Adidas’s home turf, grew three times as fast last year as Adidas’s.

It is in the States, however, where the battle royale is. Here is the place where some 40% of the world’s sports apparel and footwear sales are made. Here is where, for decades, Adidas was the cleat to beat. And here is where, today, nine of the 10 top-selling sneakers in the U.S. belong to Nike. The one holdout, meanwhile, isn’t even an offering from Adidas, but rather a shoe from Under Armour —whose sizzling growth rate has lifted the company to the No. 2 rank (behind Nike) in the sports apparel category in the U.S. That dropped Adidas to No. 3, for the first time this century.

Don’t count on Kanye to change that roster anytime soon. Nobody is going to play street ball in Yeezy Boosts. To succeed in the U.S., Adidas needs to remind Americans that it is a running-shooting-scoring brand first and foremost. All of which sets up the company’s recent success with Originals as an awkward challenge of its own. The bigger it gets in lifestyle and fashion, the less it may be seen as a cutting-edge sports company. And once that goes, there may be no going back.”

And yet instead of sports, many consumers in the U.S. associate Adidas with hip-hop culture. That dates back to 1986, when rap trio Run-DMC released the song “My Adidas.” Before long, items like track jackets and the shell-toe Superstar sneaker were surging in popularity, prodding management in 2000 to split its apparel division into two segments: sport performance (athletic gear) and sport style (fashion, which includes Originals). Under the latter, it has partnered with designers like Jeremy Scott and Yohji Yamamoto, outfitted pop sensations like Katy Perry, and designed signature shoes with even little-known rappers like Big Sean and Pusha T.

“I think it’s fair to say that sport has transcended into fashion, into lifestyle, into streetwear,” explains CEO Hainer. “I would guess that 80% of all sold basketball shoes will never see a court. They are worn just to build status and be cool. So sport has a connection to lifestyle, which I think is good. Within Adidas, of course we want to benefit from that.”

But even with hitmakers like Kanye West and Pharrell, the strategy might be a dangerous one. For better or worse, it has redefined the company Adi Dassler built.