Kanye West descended into an abyss after the display of problematic behavior. He tarnished his image and brand hampering his artistic abilities due to his despicable intentions. After the Paris Fashion Week 2022, he went on a hate spree against the Jews. He started disseminating hateful misinformation on various media platforms. Due to this erratic behavior, brands like Adidas and Balenciaga severed ties with the rapper. However, after nullifying the deal, Adidas’ finances dwindled.
The partnership between Adidas and Kanye West’s Ye goes back to 2013. When the German shoe giant was facing competition from other brands like Nike, Ye came as a savior with the Adidas X Yeezy collaboration. When, in 2015, the two fashion forces released their first collaboration Yeezy 750, the plummeting sales sky-rocketed leading to an extended contract. However, the contract now remains terminated, but Adidas is left with unsold Yeezys in their inventories. During the first earnings call, CEO Bjørn Gulden weighed in on the future of Adidas and Yeezys.
Related: Former Adidas And Yeezy Employees Accuse Kanye West Of Lewd Behavior And Bullying
Adidas Wants To Shift Toward Traditional Product Post The Kanye West Split
On March 8th, 2023, Adidas’ CEO Bjørn Gulden presented the 2023 vision for the shoe giant to journalists and analysts. The Kanye West deal termination had monetary heavy effects on Adidas. It reported that it may face a loss of $247 million after severing ties with the ‘College Dropout’ rapper.
Now, the company has $1.3 billion worth of Yeezy in its inventories worldwide. The CEO declared that the company will reduce US $0.74 from its US $3.49 dividend per share declaring 2023 as a “transition year”.
The year 2023 will be a transition year for the company because it is the first year since 2013, and Adidas will not be working with Ye on the Yeezy collaboration. There were rumors that Adidas may collaborate with Kanye again to sell the unsold sneakers.
However, Gulden has quashed any such rumors. He said that Ye is “maybe the most creative person that has ever been in my industry.” Nevertheless, the company will not go back to him after the anti-Semitism spree. So, the company wants to do something good with the remainder of the inventory.
So, to reduce it, they are aiming to make a potential sale and shift all the revenue and profit to charity work. Or else, Bjørn said, “We need to reduce inventories and lower discounts. Adidas has all the ingredients to be successful. But we need to put our focus back on our core: product, consumers, retail partners, and athletes.”
In Case You Missed: How Much Money Did Adidas Lose Due To Kanye West’s Termination?
The Company Called Itself The “Sole Owner” Of Yeezys
Due to the constant anti-Semitism that Kanye West was perpetuating, Adidas decided to cut ties in October 2022. In their official statement, the company said, “Adidas does not tolerate anti-semitism and any other sort of hate speech. Ye’s recent comments and actions have been unacceptable, hateful, and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect, and fairness.”
Despite the loss incurred after cutting ties, Adidas stands by selling Yeezy products calling itself the “sole owner” of them. During the Q3 closing call, CFO Harm Ohlmeyer assured the shareholders that they are “the sole owner of the core designs of the current Yeezys in circulation. Yeezy designs will, in fact, live on at Adidas after all, but they’ll have a completely different title when they drop.”
You Might Also Like To Read: S&P Grades Adidas Poorly For Its Debt Rating After It Severed Ties With Kanye West
