My Two Cents On The IVY PARK Launch
/The Queen B made her presence known over the weekend. In partnership with adidas, Beyoncé launched her latest IVY PARK collection. She first launched the activewear line in 2016 and originally partnered with Topshop. She bought back the ownership rights from Topshop and six months later entered into a creative partnership deal with adidas similar to the Adidas-Yeezy partnership starring Kanye West.
True to her form, the launch over the weekend was flawless. The adidas website sold out within a couple of hours and social media was ablaze with celebrity influencers promoting the gifts they received from the Queen herself.
Only time will tell if this partnership will have staying power. I believe it has the potential to do for adidas what Jordans did for Nike. But, I’ll give it a couple of years before expanding upon this thought in a well-articulated article. For now, I’m excited to this partnership unfold and see Beyoncé continue to expand her queendom.
As an investor, I am paying close attention to the athletic apparel market. Rising tides lift all boats and IVY PARK’s launch is not only a good thing for adidas, it will also have a positive impact on all companies within the vertical. Athleisure has been a growing market for over ten years and now that one of the biggest cultural icons says it’s cool to rock a jumpsuit to the supermarket, this will shift society’s fashion.
Adidas is a multinational corporation headquartered in Herzogenaurach, Germany. It is the largest sportswear manufacturer in Europe, and the second largest in the world, after Nike. The company is publicly traded as an over-the-counter stock (OTCMKTS). Over-the-counter stocks are not traded on stock markets such as NYSE or NASDAQ which are centralized exchanges. Instead they are traded via a broker-dealer network.
Other publicly-traded companies in this vertical are Nike, VF Corporation which owns The North Face and Smart Wool, Lululemon, and Under Armour. With the recent IVY PARK launch I will be tracking the success of these companies to see if they would be worthwhile investments.
The metrics I am using to track these companies relate to their liquidity. From my perspective, a company’s cash flow and liquidity give the best insights into the financial health of a company. Some of the metrics I use to track liquidity are:
Current Ratio: this measures a company’s ability to pay short-term obligations. Like payroll. It’s calculated by dividing current assets by current liabilities.
Cash Ratio: this is similar to the current ratio, except it measures how well a company’s most liquid assets can cover their immediate costs. Essentially it is calculated by taking cash on hand + cash equivalents divided by current liabilities.
Beyond these metrics, I also look at the leadership team. Have the made any recent hires or changes that will impact the company’s performance?
Lastly, I review the culture. How is the company responding and engaging with the current culture? Obviously, adidas hit the ball out of the park with Beyoncé. But there are other ways to be culturally relevant without teaming up with a pop icon. For instance, Lululemon has done an incredible job getting involved with the local community by establishing partnerships with local fitness instructors. They also host events in the store geared towards the local community.
Over the next few months, I will have my eyes on Under Armour. Compared to the other brands I’ve mentioned, their stock price is incredibly low. It hovers around $20 while the other brands are $100+. The Under Armour brand could experience a sales lift if they find a way to insert themselves into the cultural conversation.
And that’s my two cents on the IVY PARK launch and what this means for us as investors.
About Money & Mimosas: Money & Mimosas was started as a passion project by Danetha. A former NFL cheerleader turned entrepreneur, she started blogging as a way to combine all of her passions into a career. Money & Mimosas is now enjoyed by tens of thousands of readers in over forty countries with the same dream of achieving financial freedom without living frugally.
