Kanye West’s Yeezy Collab is Not Directly Boosting adidas’ Bottom Line

Kanye West’s Yeezy Collab is Not Directly Boosting adidas’ Bottom Line

image: adidas Just how heavily is Kanye West’s long-running collaboration with adidas padding the German sportswear giant’s bottom line? Directly, not very much, if at all. During a conference call with journalists on Thursday, Kasper Rorsted, adidas AG’s chief ...

May 3, 2018 - By TFL

Kanye West’s Yeezy Collab is Not Directly Boosting adidas’ Bottom Line

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Kanye West’s Yeezy Collab is Not Directly Boosting adidas’ Bottom Line

 image: adidas

image: adidas

Just how heavily is Kanye West’s long-running collaboration with adidas padding the German sportswear giant’s bottom line? Directly, not very much, if at all. During a conference call with journalists on Thursday, Kasper Rorsted, adidas AG’s chief executive officer, little in terms of revenue, instead, “suggested Yeezy contributes more in terms of halo effect,” meaning that consumers are showing favor towards adidas’ products generally due, at least in part, to the hype that surrounds West’s almost impossible-to-get Yeezy wares. 

“From a financial standpoint, [the Yeezy collaboration] has no impact on the overall financial results of the company,” Rorsted said. While he noted that “there is no doubt the Yeezy brand has a fundamental impact on our overall brand position,” the CEO emphasized the importance of the partnership with West is derived from it being “an asset from a [marketing] standpoint.”

According to Rorsted, the limited edition nature of the Yeezy footwear provides a limited financial contribution but is important for “brand heat.” That strategy “pushes brand desirability and helped Adidas steal market share from larger rival Nike.  Adidas last year overtook Nike’s Jordan as the No. 2 brand in U.S. sports footwear, behind the U.S. company’s flagship label,” NPD analyst Matt Powell told Bloomberg.

“The German company’s affiliation with West reflects a shift in sports companies’ marketing to social media and away from television and print advertisements, as they tap celebrities and musicians in addition to top athletes to reach younger consumers,” Bloomberg further noted.

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