Trapital - the ivy park problem

the ivy park problem

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Hey! Would you rather have $1,000 or dinner with YG? The Compton rapper offered an upscale $1,150 meet and greet + concert ticket for two upcoming shows that include a:

• 5-star, 3-course meal with open bar
• photo with YG
• gentleman’s club waitresses

People on the internet have jokes (as they often do with meet and greets) but they’re not the target audience! YG’s diehard fans are. Those fans can live out their “Who Do You Love” music video dreams and eat crab out in Malibu at Nobu.

Every artist has a sales funnel. It’s in their interest to serve their most passionate fans at the bottom of that funnel. Some will spend a grand to wine and dine with YG. Others will spend one month’s mortgage on a weekend trip to Vancouver to see Beyonce’s Renaissance Tour.

But what the Beyhive hasn’t done, is buy the latest Ivy Park drops.

Last week I asked you to share your thoughts on the reports on Ivy Park’s 50% sales decline and the $200 million hole for Adidas. You sent in a bunch of great answers that could standalone as Trapital memos. Today, we’ll share a few reasons why Ivy Park - Adidas didn’t take off the way many hoped it would.

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why ivy park - adidas has struggled

When Beyonce and Adidas teamed up on Ivy Park in 2019, it seemed like the sky was the limit. Beyonce wanted a partner that offered creative control. Adidas wanted to replicate Yeezy’s massive success. Even sneaker analyst Matt Powell, who is usually skeptical of celebrity influence on apparel lines, once predicted that Ivy Park could surpass Yeezy for Adidas.

But the recent Wall Street Journal report of a 50% sales decline and a $200 million drop in Adidas’ sales projections brought a series of challenges to light. There were uninspired drops, less enthused customers, and creative tension. It’s a reminder that even the most powerful celebrities still need product-market fit and alignment with business partners to succeed.

“the next Yeezy” never happened

The Ivy Park – Adidas contract is set to expire at the end of this year, but I doubt that it continues. The Wall Street Journal said that Parkwood Entertainment, Ivy Park’s parent company, and the team at Adidas weren’t on the same page. It wouldn’t be the first time Adidas and its talent partners have been at odds.

A few months ago, Kanye West voiced frustrations about Adidas’ control and decision-making over Yeezy releases. Ye’s critiques didn’t get much airtime due to his antisemitic comments and other controversies, but the tension was there. Beyonce’s not the type to publicly call out a business partner like Ye is, but her public persona also felt less tied to Ivy Park’s than Ye’s was to Yeezy.

When Adidas and Yeezy were at their best, Kanye was all the way tapped in. He brought fans behind the scenes through social media posts. Even the Yeezy prototypes were in high demand. Ye brought Forbes inside his home to see his countless designs. It was like visiting a famous painter’s house and seeing their unfinished paintings around the house.

Unfortunately, Ivy Park never got there with Adidas. Outside of the initial launch with Adidas, there weren’t many Beyonce interviews dedicated to Ivy Park, or her bringing fans under the hood to see the next drop. But to be fair, that’s never been Beyonce’s brand.

Here’s what a Beyhive member “since the House of Dereon days” said:

Another fan, Maella from France, said.

It’s very difficult to push a celebrity-influenced direct-to-consumer product in the social media era without that celebrity promoting the brand in an accessible way.

the most influential figures still need alignment

The high demand for Beyonce The Performer lines up with her exclusive, limited positioning. She rented out the Louvre to make a music video. She sells Tiffany & Co jewelry in front of never-before-seen Basquiat paintings. She gets paid eight figures to perform at private events for the richest people around the world. Her fans will hop on planes and get their passports stamped to see the Renaissance tour. Beyonce is a Veblen good.

That positioning is great for high-end concert tickets, but it’s difficult for an accessible athleisure brand.

I heard from a few Beyonce fans who said that the drops felt “repetitive,” “uninspired,” and didn’t feel like something Beyonce herself would wear. They rarely saw her wearing the brand outside of promotional Instagram posts.

Misalignment can get overlooked because of the power of Beyonce overall, but even artists who have had success with DTC brands can struggle elsewhere. Rihanna’s Fenty Maison was a historic achievement when announced, but it was suspended less than a year later. Here’s what I wrote in February 2021 when the suspension of the brand was announced:

LVMH’s Fenty clothing line was a departure from what made Fenty Beauty and Savage X Fenty billion-dollar success stories. They were for women of all shades and shapes. Both brands were inclusive, which lines up with the external image of Rihanna. She replies to online comments, calls haters out, smokes weed, and cheers for her favorite teams. She seems more like one of us.

Another Beyonce fan, Reni in Lagos, summed it up well:

every artist’s funnel is different

Sure, Ivy Park could be in a slightly better position if both business partners were aligned. But the products, the celebrity, and the fans also need to be aligned too.

Beyonce has a gift, talent, and work ethic that has reaped its rewards in music and live performances. She’s top two and she’s not two. Ivy Park may not become the next Yeezy, but it’s a helpful reminder of what artists can and can’t sell effectively.

The Beyhive will clearly spend thousands of dollars on a destination trip to see her perform. They may spend hundreds of dollars on vinyls and merch. They have even spent ten dollars on Tidal or HBO to watch and listen to Lemonade. Ivy Park not working out is an unfortunate problem, but in the big picture, it’s a good problem to have.

Hope you enjoyed this memo. If so, please share. Forward this email to someone who should read it. Text it to a friend. Drop the link in the group chat.

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