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Unsold Yeezy shoes, end of Ye deal hit Adidas’s bottom line

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It’s been almost seven months since Adidas parted ways with Ye, but boxes of his favorite Yeezy shoes are still piling up in warehouses.

Fate of unsold Yeezy shares worth €1.2 billion (CAD $1.78 billion) seeks to engineer a rebirth from loss of profitable sneaker line and continued repercussions over former relationships with musicians Heavy on the German sportswear company. fashion designer.

Adidas is “nearing a decision and narrowing its options” on what to do with its sneakers, new CEO Björn Gulden said during a conference call on Friday.

However, he said a decision has not yet been reached as “so many stakeholders” are involved in the discussion.

Adidas is stuck with a stack of flagship Yeezy-branded shoes after ending its relationship with Ye in October, citing anti-Semitic and other offensive comments on social media and in interviews.

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Gulden, who took over as CEO in January after Ye’s split, declined to say whether the possibility of destroying the shoes has been ruled out, but said the company is “trying to avoid it.”

He has previously said other options have drawbacks. Because selling sneakers means paying Ye royalties, re-sewing them to remove the brand identification is dishonest, and giving them to people in need has a high market value. It may lead to resale.

Gulden declined to say how many Easy Shoes Adidas has.

Losing the Yeezy brand “of course hurts us,” Gulden said in a statement. $40 million), the company said.

sales stumbling block

The company has also faced other issues related to Ye. An investor sued Adidas in the US a week before his split, claiming the company knew of Ye’s offensive remarks and harmful behavior years before the split and took precautions to limit financial losses. He claimed he didn’t.

The lawsuit, which represents those who purchased Adidas securities between May 3, 2018 and February 21, 2023, argued that Ye, in his 2018 comments, said slavery was a “choice.” and reports that Ye made anti-Semitic remarks in front of Adidas staff.

The company said last week that it “rejects these baseless claims and will take all necessary steps to vigorously defend against them.”

The termination of the Ye partnership will result in adidas losing sales of €600 million (887.7 million Cdn) in the last three months of 2022, leaving a net loss of €513 million (758.9 million Cdn). I was.

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