At the end of last year, Adidas He made a drastic (but correct) decision: break his relationship with the controversial singer Kanye West after 9 years of contract. The reason? The last outing of the musician with clear racist connotations. Already then the German firm announced that this would entail serious economic losses, but let's say that now it has had to face reality and all those millions that are going down the toilet. Not to mention, of course, the enormous amount of stock that accumulates from yeezy sneakers.
a necessary divorce
Despite years of working relationship, the German company Adidas shoes decided, in November 2022, to announce that his contract with the singer Kanye West was coming to an end. The artist had crossed the line - well, actually, he had already done so several times with his anti-Semitic comments - by showing up at an event where he was wearing a T-shirt that read "White Lives Matter". This message was a clear mockery of the slogan "Black lives matter" that has become so popular in recent years due to the scandalous discrimination that the black population continues to suffer in the US.
Worst of all, the event itself was a surprise parade of Adidas, to promote his range of Yeezy sneakers, which had been organized during the great fashion week in Paris, so absolutely all the press was there to capture such a moment. This was the straw that broke the camel's back for the sportswear firm to decide to break up with West, something that, it estimated, would lead to losses of more than 250 million for the following quarter.
Nothing to do with the amounts that are now underlined in red in the brand's offices. The company currently holds a YoY drop of $441 million and fears that it could reach 635 million dollars. And this is not counting the 500 million in Yeezy shares that are unsold.
And a mountain of sneakers in the warehouse
In addition to the company's outrageous figures - they haven't seen anything like this in more than 30 years of business - Adidas is facing another problem: it doesn't know what the hell to do with the large amount of stock that accumulates from the Yeezy family. The value of the set is estimated at 500 million dollars and it is still looking for what destination to give it:
«We could sell the product at cost… We could sell it at a small margin and give the margin away for different donations… The goal we have is to do what is likely to do us the least harm, and do some good", point Bjorn Gulden, former CEO of Puma and currently CEO of Adidas.
donate to the charity It is not an option either, since there is a risk that it ends up in the wrong hands and being resold on the second-hand market to make a profit. Yes, he has considered "disfiguring" the shoes before donating them to avoid bad practices, but of course, this would entail an additional cost and Adidas is not in the position to add extra expenses...
What a ballot.