Adidas generates millions from Yeezys after Kanye West split

adidas-generates-millions-from-yeezys-after-kanye-west-split

Kanye West in front of Adidas and Yeezy logos.Image source, Getty Images

By Lora Jones

Business reporter, BBC News

Adidas generated millions from its first “drop” of Yeezy trainers after ending the collaboration with rapper and fashion designer Kanye West.

The sportswear giant reported sales of €400m (£344m) from the shoes between April and June this year.

Adidas cut ties with West, known as Ye, last November after he made a series of anti-Semitic comments on social media.

It has pledged to donate some of the proceeds of the sales to charities who work on combating hate.

The demand for Yeezy shoes has not faded though, with the trainers remaining wildly popular in the resale market.

Adidas boss Bjorn Gulden said the firm will “continue to carefully sell off more of the existing Yeezy inventory” in its latest financial update.

He argued the sale was “much better than destroying and writing off the inventory”, but acknowledged that it boosted the company’s “general financial strength”.

Image source, Getty Images

Image caption,

Kanye West designed trainers for Adidas under the Yeezy brand

Strong demand for Yeezys helped the company narrow its projected loss for the year to €450m, down from the €700m previously expected.

Sales from the Yeezy line were similar to the level seen in the same period in 2022 before the high-profile fall-out.

Adidas also set aside €110m for charitable donations to the likes of the Foundation to Combat Anti-Semitism and the Anti-Defamation League – a move it had announced previously in the wake of Kanye West’s remarks online.

In May, Adidas said it had about €1.2bn worth of Yeezy shoes sitting in storage after the highly-profitable partnership came to an end.

On Thursday, it said that if it decided not to sell the rest of the inventory it would take a hit of about €400m.

Its latest results did not account for the recent second release of the trainers, which is likely to give it a further financial boost.

JD Sports said it had started selling Yeezy products from the German sportswear giant’s second release of the shoes on Wednesday.

But Alice Price, associate apparel analyst at research firm GlobalData, said that the sale of remaining Yeezy stock was a “short-term solution for a brand that has lost some of its identity and relevance in the market”.

She suggested that Adidas was now trailing behind some of its competitors like Puma who offered more on-trend and innovative products.

Despite Mr Gulden’s efforts to turn the chaotic situation around, Adidas is being sued by investors who claim the firm knew about Kanye West’s problematic behaviour years before it ended their partnership.

Investors allege Adidas failed to limit financial losses and take precautionary measures to minimise their exposure.

Adidas has previously said it rejected “these unfounded claims”, adding that it would take “all necessary measures to vigorously defend ourselves against them”.

You might also like...

P