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Adidas (ADDYY) Hits the 'Ye Button with New Kanye West Partnership
Adidas (ADDYY - Free Report) stock is up 2.5% as of 2:20 EDT on Wednesday after announcing a new long-term partnership with rapper/designer Kanye West.
Adidas, the German retailer known for selling shoes, clothing and accessories first partnered with Kanye West in 2013. West was associated with Nike at the time, and severed his ties with the company in order to join Adidas on a $10M deal.
The new deal is said to be the most significant partnership Adidas has ever formed with a non-athlete. The “adidas + KANYE WEST” fashion line will have products for men and women, and will incorporate both fashion wear and athletic gear into its offering. Although not confirmed, there is speculation that Adidas will open stores specifically to sell this line.
Going along with the announcement, West publicly announced that the partnership “illustrates that anyone with a dream can dream without limitations.”
How Will This Help?
From the beginning of their relationship until now, Adidas has released two popular West-designed shoes under the “Yeezy Boost” label. When the Yeezy Boost 750 first went on sale in January of last year, the first run of 9,000 sold out in minutes, and now sells on eBay (EBAY - Free Report) for prices as high as $3,500.
Adidas’s high profile partnership is one of many, along with soccer clubs Manchester United and Real Madrid, along with officially sponsoring the UEFA Euro 2016 tournament. As SeekingAlpha points out, Adidas stock is up 37% year to date compared to a 16% loss for competitor Nike (NKE - Free Report) .
Bottom Line
Thanks to their approach to marketing and product creation, Adidas has turned things around. It is diversifying its product portfolio, remained a stable stock through uncertainty, and is still worthy of long term consideration.
Adidas currently sits at a Zacks Rank #2 (Buy).
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