Dive Brief:

• Adidas and Peloton on Thursday announced a collaboration that takes full advantage of the pandemic-powered wave of interest in activewear and home-based workouts. Their first effort is an apparel collection dubbed "adidas x Peloton SS21" designed by Peloton instructors.

• The 11-piece collection includes tanks, tights, shorts, hoodies, tees, crewnecks, sports bras and joggers priced $30 to $85. They will be sold on adidas.com and apparel.onepeloton.com, and in select Adidas retailers and Peloton showrooms starting March 25.

• "The launch will also include a series of on-demand classes, available on the Peloton Bike, Bike+ and the Peloton App starting March 18, as well as a live class celebrating the collection drop on March 25," according to a press release from the companies.

Dive Insight:

This partnership continues Peloton's effort to grow its apparel sales, which include its own private labels as well as third-party brands.

"Peloton has been very successfully launching apparel collaborations with high profile and emerging brands since its inception," BMO Capital Markets Managing Director Simeon Siegel said by email. "This is less new than it sounds though. Fitness brands have been syncing with other brands forever and these brands are some of the largest brands in the world, for the very reasons that they adeptly employ a range of wholesale models, from heavy sales into department stores to more limited drops, as with Peloton and other boutique fitness players."  

It's also a welcome bit of attention for Adidas, which has struggled behind Nike and has been more apt to garner headlines for dropping Reebok than for any actual sneaker drop. 

Adidas appears to be addressing that, saying last week that it will aim for 50% of its sales to be direct-to-consumer by 2025, revamp its store concept strategy and focus more on athleisure, among other shifts. The association with Peloton will help, Siegel said. "Ultimately, this is another revenue generator but Peloton's apparel has historically been a helpful referral tool as well," he said.

While hitching its wagon to Peloton, whose upward trajectory will likely continue even after the pandemic, is a good move for Adidas, it won't change much, according to Jane Hali & Associates analyst Jessica Ramírez. Compared to rivals like Nike and Lululemon, Adidas isn't doing well in popular segments like outdoor and running, and "doesn't have any of the top sneakers," despite that being its key category, she said.

"Adidas has been a little bit at a loss and I think hasn't been competing as aggressively as they used to," Ramírez said by phone. "With their announcement of their direct-to-consumer changes and the whole rethinking of their strategy last week, it kind of shows that they're trying to reform everything. With Peloton, I think they're trying to latch on to something. I think that's great for them, but it seems to be a very small line, so I don't think it would move too much. It would be another collaboration, like any other one."