Adidas finally decided what to do with Yeezy stock

Unsold Yeezys have been hanging on to Adidas ever since the German sportswear company decided to end its partnership with Ye, the rapper formerly known as Kanye West.

The company will lose More than 770 million dollars If it doesn’t sell out the millions of Yeezys accumulated in its warehouse, she said during earnings reporting on May 5.

However, Adidas has been wary of profiting from shoes designed alongside Ye since Collaboration ended On the rapper’s anti-Semitic comments. Yeezy sales immediately ceased.

At Adidas’ annual shareholder meeting yesterday (May 11), CEO Bjørn Gulden announced that the brand is seeking to “sell parts of this inventory and donate the money to organizations that help us that have also been hurt by Kanye’s remarks,” quoted in CBS News.

But selling Yeezys won’t just be a charitable act. The rapper will benefit from the proceeds of any stock Adidas sells, Gooden confirmed in March.

The future of Yeezys

Although the line was suspended, getting rid of existing products was a step too far. Golden told investors to “burn several million pairs [of shoes] It makes no sense.” Details of how and when the inventory will be offloaded have yet to be determined.

Meanwhile, Adidas could technically produce more Yeezy sneakers even without Ye. The company owns all the patents and intellectual property rights, designs and colors. She could delete the trademark, drop the “Yeezy” name, and continue selling the shoe.

However, analysts warn about this. Shoes “will always be synonymous with West, and this will likely mute customer demand,” Global Data Garment Analyst Darcy Job He said.

Adidas Yeezys business, by the numbers

$2 billion: Yeezy sales in 2021

8%: Adidas share Total sales represent Yeezys

1.2 billion euros ($1.3 billion): The revenue that Adidas will forgo in 2023 if it doesn’t sell Yeezy inventory

15%: Royalties you receive from Yeezy products. he required 20%althoug.

20%: Sales declined in North America because “the region is particularly affected by the discontinuation of Yeezy business.” Excluding Yeezy, sales are down 5%.

One more thing: most of Ye’s net worth came from the Adidas Yeezy collaboration

Several companies, including the Fashion House Balenciaga And FootLocker retailerHe broke off relations with Yi in the wake of his anti-Semitic sermons. But the decision to separate Adidas hit the hardest. Just losing the Yeezy contract was enough to demote Ye from billionaire status because the deal was the largest share of the musician’s net worth, According to Forbes magazine.

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