Adidas Recoups Losses by Selling Kanye West-Designed Footwear
Adidas has sold €400m (£345m) worth of Kanye West-designed footwear from April to the end of June this year, matching the sales figures from the same period last year. This comes despite the company severing ties with the rapper due to a series of antisemitic comments made by West, now known as Ye, on social media, TV, and radio. After ending the partnership, Adidas was left with a surplus of unsold Yeezy brand trainers.
However, the German sports giant has announced that it is recouping its losses by selling the stock previously made in collaboration with the musician. The sale of the Yeezys contributed approximately €150m (£129.4m) to the company’s operating profit in the second quarter of this year. Despite this positive development, Adidas acknowledges that there is still a financial impact for the year as a whole. In the first three months of 2023, there were no Yeezy revenues, whereas in the same period the previous year, sales worth €400m (£345m) had been recorded.
For the first half of this year, revenue from Yeezy trainers amounted to €400m (£345m), compared to €800m (£690m) in the first six months of last year. As a result, Adidas is expected to break even for the entirety of 2023, with the potential write-off cost of the Yeezys estimated at €400m (£345m), which is lower than the previously projected €500m (£430m).
Adidas has also announced that a portion of the proceeds from the Yeezy sales will be donated to charity. While the exact value of the charitable contributions has not been disclosed, the company has named organizations such as the Anti-Defamation League, the Philonise & Keeta Floyd Institute for Social Change, and Robert Kraft’s Foundation to Combat Antisemitism as beneficiaries. Adidas CEO Bjørn Gulden stated, “We will continue to carefully sell off more of the existing Yeezy inventory. This is much better than destroying and writing off the inventory and allows us to make substantial donations to organizations.”
Overall, despite the controversy surrounding Kanye West, Adidas has managed to turn a challenging situation into an opportunity for recovery and philanthropy.