Adidas said it hasn’t yet decided what to do with leftover merchandise from Yeezy, a co-brand with Ye (Kanye West). In October, the sporting goods maker cut ties with him over repeated anti-Semitic comments.
The company immediately stopped selling Yeezy line products, but has yet to decide whether to sell the rest in new markets (outside the US and Europe) or receive $526 million in compensation for the refusal to sell, he writes. Business Insider. .
The decision to part ways with Ye was difficult enough for the company, as Yeezy generated $1.2 billion in sales of Adidas collections last year.
Adidas’ total revenue in 2022 was $23.7 billion (6% more than the previous year). At the same time, net income decreased by 70% to $671 million.
The company’s new CEO, Bjorn Gulden, also said that in the event the balance is sold (presumably to Jordan), part of the proceeds will be transferred to charitable foundations.
“This is one of the toughest decisions I’ve ever been involved in,” Gulden said, “as soon as we have enough data to make a decision, we’ll make it.”
Gulden joined Adidas as CEO on January 1 and previously held the same position at rival Puma, where he promoted co-branded products with Jay-Z, J.Cole and Rihanna.
Regardless of what Gulden and Adidas decide to do with the remaining Yeezy inventory, the year is likely to be a challenging one. Adidas expects revenue to drop substantially.
“The current year of 2023 will be a transition year to build a reserve for 2024 and 2025, we need to reduce stocks and reduce discounts,” Gulden said.
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