Yeezy Shoes Still Stuck In Limbo After Adidas Split With Ye

FRANKFURT, Germany — It’s been over seven months since Adidas split with Kanye West, and crates of his popular Yeezy trainers are still piling up in warehouses.

The destiny of 1.2 billion euros ($1.3 billion) in unsold Yeezy goods weighs heavily on the German sportswear firm as it attempts to recover from the loss of the profitable sneaker line and the ongoing fallout from its past links to Ye.

Adidas is “getting closer and closer to making a decision” on what to do with the trainers, and the “options are narrowing,” according to new CEO Bjorn Gulden in a conference call Friday, following a figure of 400 million euros ($441 million) in lost sales at the start of the year.

However, he said no conclusion had been reached because “so many interested parties” were involved in the conversations.

Adidas is stuck with stacks of its signature Yeezy brand sneakers after severing ties with Ye in October due to his antisemitic and other hateful comments on social media and in interviews.

Gulden, who took over as CEO following the Ye split in January, declined to say whether destroying the shoes had been ruled out but said the firm was “trying to avoid that.”

He has previously stated other solutions have drawbacks: selling the trainers would include paying royalties to Ye, restitching them to erase the brand identification would be dishonest, and giving them out to people in need could lead to resale due to their high market value.

Gulden refused to reveal how many pairs of Yeezy shoes Adidas is stuck with “because then the consumer would know how many we have, and that could have an impact on demand.”

“Of course, losing the Yeezy brand is hurting us,” Gulden stated. According to the Herzogenaurach-based company, if Adidas does not sell the remaining Yeezy stock, earnings will be reduced by 500 million euros this year.

Gulden refused to reveal how many pairs of Yeezy shoes Adidas is stuck with.

According to the corporation, net sales fell 1% in the first quarter to 5.27 billion euros but would have increased 9% with the Yeezy line. It reported a net loss of 24 million euros, compared to a profit of 310 million euros at the same time the previous year.

Operating profit, which includes key factors like taxes, fell to 60 million euros from 437 million euros the previous year.

Gulden stated that Adidas’ performance was “a little better than we had expected” as the firm strives to relaunch growth and move past its split with Ye. He described 2023 as a “year of transition” on the road to “a better ’24 and a good ’25.”

The corporation is also dealing with additional issues related to the artist. Investors filed a lawsuit against Adidas in the United States a week ago, arguing that the firm was aware of Ye’s hateful words and detrimental behavior years before the breakup and failed to take preventative measures to limit financial losses.

The complaint, filed on behalf of those who purchased Adidas securities between May 3, 2018, and February 21, 2023, cited 2018 comments in which Ye stated slavery was a “choice” and reports of Ye making antisemitic remarks in front of Adidas employees.

Last week, the corporation rejected “these unfounded claims and will take all necessary measures to vigorously defend ourselves against them.”

The breakup of the Ye partnership also cost Adidas 600 million euros in missed sales in the last three months of 2022, contributing to the company’s net loss of 513 million euros.

According to Adidas, an operating loss of 700 million euros is possible this year, owing mostly to a 500 million-euro damage if the existing Yeezy sneakers are not sold.

SOURCE – (AP)