For the past few weeks rumors had been swirling that adidas was closing a deal with Kanye West to move the remaining half a billion dollars worth of Yeezy products that adidas pulled from shelves after they cut ties with him due to his antisemitic outbursts on social media.
Now, it seems like those rumors was much ado about nothing as Raw Story is reporting that adidas still has no clear plan on what to do with the inventory they have stashed in their warehouses. Announcing that they recorded a revenue loss of $1.2 billion euros ($1.3 billion) in 2022, adidas finds themselves stuck with $500 million worth of product that many sneakerheads still want to get their hands on but can’t sell due to the circumstance that Kanye West put them under.
“Should the company irrevocably decide not to repurpose any of the existing Yeezy product going forward,” it would have to write-off the entire inventory, it said.
That would lower the company’s operating profit by an additional 500 million euros in 2023, it said.
Y’all know adidas isn’t trying to take a $500 million dollar loss like that, but at this point what else can they do? It was reported that Yeezy apparel accounted for roughly 60% of Adidas sales the past few years with Kanye’s popularity easily eclipsing any athlete or celebrity that adidas had under their umbrella. Still, the three stripe brand is going to try to make the most of this year in hopes that it’ll serve as a launching pad into a more fruitful future going forward.
Bjorn Gulden, the group’s new chief executive, said the company will use 2023 as a “transition year to build the base for 2024 and 2025”.
“We need to reduce inventories and lower discounts. We can then start to build a profitable business again in 2024,” he said.
Next year was shaping up to be a key one for sporting apparel companies, with both the European football championships and the Olympic Games taking place.
Good luck with that, b.