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Brands & Merch Business News
Initial sale of Yeezy stock by Adidas following collapse of Kanye West partnership generated €400 million
By Chris Cooke | Published on Friday 4 August 2023
Adidas has confirmed that it generated €400 million from the sale of Yeezy trainers in the second quarter of this year after deciding to start selling off stock it was sitting on from its abandoned partnership with Kanye West.
The sportswear company announced in October last year that it was terminating its long-running and very profitable alliance with West after his increasingly controversial racist and anti-Semitic statements made the partnership untenable.
The sudden axing of the deal around West’s Yeezy fashion brand cut off a lucrative revenue stream for Adidas, and left the company with an awful lot of unsold stock.
In May this year it announced it would start selling some of the Yeezy products sitting in its warehouses via its website and app.
Keen to counter any criticism of it profiting from it’s former alliance with the still pretty controversial West, the sportswear firm said that it would donate some of the proceeds from the sale of the products to charities, including the Anti-Defamation League and the Philonise & Keeta Floyd Institute For Social Change.
At the time Adidas CEO Bjørn Gulden said: “After careful consideration, we have decided to begin releasing some of the remaining Adidas Yeezy products. Selling and donating was the preferred option among all the organisations and stakeholders we spoke to”.
Confirming the those sales had gone well in an update to investors, Gulden confirmed the company will “continue to carefully sell off more of the existing Yeezy inventory”, insisting that that approach is “much better than destroying and writing off the inventory”.
A second round of Yeezy product sales is already underway with retail partners involved this time as well as Adidas’s own digital channels.
The continued demand for the Yeezy trainers will help the company mitigate the commercial impact of terminating its partnership with West. Though it also needs to put in place plans for how it will continue selling products that appeal to the Yeezy-buying audience once the current stock is all sold off.
In terms of the charitable donations, Reuters reports that Adidas donated €10 million to its selected charities in the second quarter of this year and has set aside another €100 million to donate to those organisations down the line.
