Adidas Wonders What To Do With Yeezy Shoes After Ye Split in 2022

Germany,  FRANKFURT — After splitting with the artist formerly Kanye West, Adidas is still trying to figure out what to do with 1.2 billion euros ($1.3 billion) worth of Yeezy sneakers. This has resulted in a significant loss for the German sportswear manufacturer at the end of 2017 and future pain expectations.

Selling the well-liked shoe line would entail paying royalties to Ye, who was fired by Adidas five months ago after making anti-Semitic remarks on social media and in interviews, according to CEO Bjorn Gulden. During an earnings call on Wednesday, he mentioned “several variables” regarding what to do with the shoes that are currently stored in warehouses.

Although some businesses have provided recycling options, destroying them could “create sustainability difficulties,” according to Gulden, who was appointed CEO following the uproar over Ye’s comments. Restitching them to sell them while obscuring the Yeezy brand “is not very honest. Therefore, it’s not an option,” he continued.

The goods would “come back again very quickly” because of their high market value, so suggestions to donate them to those in need in locations like earthquake-stricken Syria or Turkey “aren’t an option,” Gulden said.

“I can promise you that the people who this has wounded will also get something positive out of it and gain donations and revenues in different ways, shapes or forms,” Adidas CEO said if the company decides to sell the shoes.

Adidas cut relations with Ye in October after other companies had been pressured to do the same due to the rapper’s harsh comments towards Jews and other groups. Currently, the business is attempting to replace its flagship Yeezy brand, which experts have estimated to account for as much as 15% of its net income and find new ways to become profitable.

Adidas cut relations with Ye in October.

In the final three months of 2022, the Ye split cost 600 million euros in lost revenues, contributing to the company’s 513 million euro net loss. In contrast to the decline, ascribed to rising supply prices and declining sales in China, the fourth quarter of 2021 saw a profit of 213 million euros.

If the company chooses not to repurpose the remaining Yeezy products in stock, it anticipates further losses of 500 million euros to its earnings this year. The business anticipates an operating deficit of 700 million euros in 2023.

Gulden claimed that while “so many corporations” were ready to purchase the well-liked shoes, doing so would require paying royalties to Ye. But, “it is not accurate” that the corporation was discussing selling them.

“Gazillions of people” had expressed their thoughts, and “when you’re sitting on the inside, it looks a little bit different than it looks on the outside,” he had heard.

Adidas, according to Gulden, is currently looking into claims made by former workers that Ye poisoned the workplace and that the sportswear firm was aware of his unsavory behavior but did little to safeguard staff.

In 2024, the CEO predicted, “we can start to establish a profitable firm again.” The CEO referred to 2023 as “a transition year.”

Net sales for the fourth quarter of last year increased just 1.3%, to 5.21 billion euros

Net sales for the fourth quarter of last year increased just 1.3%, to 5.21 billion euros, over the same period in the previous year. The company cited a 50% decline in revenue in China and greater supply and shipping expenses, which pricing increases could not compensate for.

The Herzogenaurach, Germany-based corporation reported a net profit of 638 million euros for the entire year on revenues that increased 6% to 22.5 billion euros.

Adidas’ top sales and marketing executives were replaced, further upending its hierarchy. Following Roland Auschel’s retirement from the company after 33 years, Arthur Hoeld, now in charge of the Europe, Middle East, and Africa region, will take over as global sales chief.

Brian Grevy, the head of global brands, will retire on March 31. CEO Gulden will handle his marketing and product duties.

SOURCE – (AP)