Following its extremely public split from the artist legally known as Ye – and formerly known as Kanye West – Adidas revealed the company’s operating profits were on track to take a €700 million ($1.13 billion) hit unless its excess Yeezy inventory was sold.
Now, rather than face the full brunt of what will effectively mark its first operational loss in 31 years, Adidas has decided to sell its remaining stock of Kanye West’s Yeezy sneakers.
And to protect themselves from whatever criticism the public may fire in their general direction, some of the proceeds will be donated to charity. The key phrase here, of course, being “some.”
“What we are trying to do now over time is to sell some of this merchandise… burning the goods would not be a solution,” Adidas CEO Bjørn Gulden said at the company’s annual shareholder meeting (via BBC).
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Gulden added that selling the merchandise as opposed to donating it outright will prevent the products from reaching the market indirectly.
But even after they’ve offloaded the kicks on track for a rebrand in the wake of certain anti-Semitic remarks, according to Business Insider, Adidas would only still just be breaking even.
“The numbers speak for themselves. We are currently not performing the way we should,” Gulden explained on a previous occasion.
“2023 will be a year of transition to set the base to again be a growing and profitable company. We will put full focus on the consumer, our athletes, our retail partners, and our Adidas employees.”
Earlier this month, Gulden outlined how North American sales were impacted in particular, having experienced a hefty 20% loss. The Yeezy-associated loss alone reduced sales by approximately €400 million (£649 million) in the first quarter of 2023.
Incidentally, last year, Kanye West claimed that Adidas offered him a billion-dollar buyout for Yeezys.
In yet another signature Instagram tirade wherein the Grammy Award-winning multihyphenate aired his grievances about the German sportswear company – namely the actions of Senior Vice President & General Manager Daniel Cherry III, the release of products without his participation, as well as accusations of plagiarism – Ye shed light on the economics of being a sneaker don.
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“The fact [Adidas] felt they could colour my shoes and name them without my approval is really wild,” said Ye.
“I really care about building something that changes the world and something I can leave to my kids. They tried to buy me out for $1 billion. My royalties next year are $500 million alone.”
”I have no chill. It’s going to cost you billions to keep me. It’s going to cost you billions to let me go, Adidas.”
Looks like the prophecy came full circle.
