In the previous year, following a series of contentious and provocative statements and actions, the footwear brand Adidas officially severed connections with Ye, the artist formerly known as Kanye West. The company has already ceased the production of Ye’s Yeezy sneakers, resulting in various new challenges for them.
Primarily, as Adidas will no longer retail Yeezys, a product line that was highly lucrative for them in the past, they are anticipated to undergo a significant financial setback. Recently, Adidas revealed that the discontinuation of Yeezy sales might lead to a loss of approximately $1.28 billion in annual income. The disclosure of this reduction triggered a sharp decline in Adidas shares on Friday, plummeting by approximately 11%.
Subsequently, despite the termination of Yeezy production, Adidas still possesses a substantial inventory of unsellable shoes. Hence, Adidas is investigating alternate methods of selling these shoes that could potentially yield some profit. Their current strategies include removing the Yeezy branding and selling the shoes at discounted rates or marketing them in smaller international markets outside the United States. In a worst-case scenario, donating the shoes to charitable institutions, although financially unbeneficial, may enhance their public relations.
Adidas indicates that severing ties with Kanye West could result in over $1 billion in sales loss https://t.co/CvxBrjcSD5
— CNN (@CNN) February 11, 2023
According to Matt Powell, a specialist in footwear retail who collaborated with Adidas, told NPR, “There is no graceful or profitable escape from this situation. The focal point is on mitigating the impending negative outcomes.”
