Jovani Hernandez adidas and Kanye West officially severed ties in October 2022, leaving the German sportswear brand with a multi-million dollar conundrum: What to do with unsold product? After months of deliberation, the brand – helmed by CEO Bjørn Gulden – decided to sell all remaining stock of Yeezy products to the tune of more than $560 million (USD), according to the Financial Times.
The Three Stripes has suffered widespread backlash over its decision to end its partnership with Mr. West – whom now goes by “Ye” – late last year. Ye has publicly denounced adidas for a number of grievances, namely its refusal to give him a seat on the board of directors and for offering a number of footwear products intentionally similar to some of the most popular adidas Yeezy designs. The final straw, however, was a number of antisemitic comments made in-person and on social media. Although adidas was tough on its stance against discrimination, it suffered significant financial losses; according to earnings insights, the brand lost $440 million in the first quarter of 2023 from the business’ Yeezy-sized gap.
Gulden joined the Three Stripes in January of this year and inherited the adidas Yeezy problem. A public admirer of Ye, the former PUMA CEO ultimately decided to sell remaining Yeezy merchandise over the course of a couple of weeks. According to sources close to the matter, the German sportswear behemoth paid 15% commission from all goods sold to Ye. adidas also committed $9 million to give charities and organizations across the U.S. and China in an effort to do good in light of selling product associated with a figure as divisive as Ye.
Big box retailers like Foot Locker are on schedule to sell their own inventory of unsold Yeezys come August. There haven’t been any updates to the ongoing relationship between adidas and Mr. West, but what’s certain is that the Three Stripes could use the American artist’s help on the financial front. adidas’ next earnings report will be published on August 3rd, which should reveal how much of a loss the Yeezy partnership continues to be for the German brand.
The information was first reported by Financial Times
