Celebrity Collaborations: Success and Struggles in 2025 Retail Market

NEW YORK, NY — In 2025, celebrity collaborations have shown mixed results for brands, impacting investors significantly. Two notable partnerships are Travis Kelce‘s collaboration with American Eagle Outfitters (AEO) and Bad Bunny‘s alliances with Adidas and Ritz Crackers. While both campaigns generated initial buzz, their long-term sustainability and brand equity reveal critical differences.

AEO’s partnership with NFL star Travis Kelce, branded as “AE x Tru Kolors,” sparked a remarkable 9.67% surge in stock prices in August 2025, the largest jump since 2021. This collaboration featured over 90 limited edition items priced between $14.95 and $179.95, merging Kelce’s athletic style with Gen Z aesthetics. The timing of the announcement coincided with Kelce’s engagement to pop star Taylor Swift, boosting media coverage and social media engagement.

However, the excitement around the stock’s rise belied deeper operational issues within AEO. The company reported a 5% revenue decline in the second quarter of 2025 and a dramatic 48.7% drop in earnings per share year-over-year. Despite a 3% increase in comparable sales in Q3 2024 following the campaign, the trend reversed in Q1 2025, with declines reported from both AEO and its Aerie segment.

Challenges such as stagnant customer retention rates and a lack of improvement in the U.S. denim market share further highlighted the difficulties of translating celebrity-driven hype into durable loyalty. This pattern echoes a previous collaboration with actress Sydney Sweeney, which also faced backlash despite initial success. AEO’s experience with Kelce underscores the risks of relying solely on celebrity influence without addressing internal inefficiencies.

In a stark contrast, Bad Bunny’s collaborations with Adidas and Ritz Crackers emphasize cultural relevance and local engagement. The Adidas Ballerina sneakers, connected to Bad Bunny’s album, efficiently intertwined martial arts and ballet aesthetics with street style, appealing to diverse audiences. On the other hand, Ritz Crackers’ “Salty Club” campaign included a Super Bowl ad paired with pop-up experiences at Bad Bunny’s residency in Puerto Rico, aiming to position the brand as culturally significant.

Bad Bunny’s partnerships have reportedly generated about $200 million in economic impact for Puerto Rico, showcasing the effectiveness of localized strategies. Adidas reported a 12% growth in currency-neutral revenue in Q2 2025 and a 58% increase in operating profits, suggesting that Bad Bunny’s collaborations have enhanced the brand’s resilience amid U.S. tariff challenges.

Overall, the divergent outcomes of these celebrity partnerships offer important lessons for investors in the retail sector. With AEO showing that short-term stock spikes may not reflect long-lasting brand strength, and Adidas demonstrating the value of culturally driven narratives, the key takeaway is the necessity for brands to align celebrity collaborations with broader operational strategies to secure long-term success.