Adidas strikes new deal with Kanye West in U.S. market push

By Emma Thomasson

BERLIN (Reuters) – Adidas <ADSGn.DE> has agreed to expand its partnership with Kanye West, including opening new stores, hoping to build on its higher profile in the U.S. market since it poached the singer-turned-designer from Nike <NKE.N> in 2013.

The deal was described by the German sportswear firm on Wednesday as the most significant partnership between a non-athlete and a sports brand and said it will develop beyond its current lifestyle focus to introduce sports performance designs.

Adidas will create a new brand with West for footwear, clothing and accessories, and also plans new stores selling West’s Yeezy branded products along with Adidas products.

West has said that he moved from Nike to Adidas because the German company gave him more creative freedom and royalties, which he said the U.S. firm told him it reserved for professional athletes such as basketball star Michael Jordan.

An Adidas spokeswoman declined to give financial details or specify the length of the deal. Media reports put the value of the previous deal at $10 million.

Adidas has regained some ground in the U.S. market in recent months since falling into third place behind Nike and Under Armour <UA.N>.

Adidas has increased its spending on marketing and lifted its profile thanks to collaborations with celebrities such as West and singer Pharrell Williams. It has also poached the NFL’s Aaron Rodgers and basketball player James Harden from Nike.

Although Nike and its Jordan brand still dominate the U.S. footwear market, Adidas sales rose almost two-thirds in May to take a 6 percent share, according to data from market research firm NPD.

Nike’s overall share of the U.S. sportswear market rose to 21.1 percent in 2015 from 20.1 percent in 2014, while Under Armour was up at 3.9 percent from 3.5 percent and Adidas rose to 3.4 percent from 3.3 percent, according to Euromonitor data.

On Tuesday Nike gave a lower than expected forecast for future orders, highlighting its struggle to fend off competition from Adidas and others, especially on its home turf.

Adidas said a dedicated team based in the firm’s U.S. headquarters in Portland, Oregon would work with West on the development of all Yeezy products.

West’s designs so far for Adidas have concentrated on limited edition footwear, with fans camping outside stores to wait for the release of the latest Yeezy Boost shoes.

“This partnership illustrates that anyone with a dream can dream without limitations,” West said on Wednesday.

Adidas has announced two other major partnerships in recent weeks — one with the Wanda business empire to sponsor endurance events and promote other sports in China, and the other an extension of its shirt deal with the German soccer team.

(Reporting by Emma Thomasson; Editing by Harro ten Wolde and David Goodman)