BERLIN — The new CEO of Adidas has $1.3 billion worth of Yeezy sneakers that he doesn’t know what to do with.
Stocked in warehouses around the world, the sneakers are a reminder of the once-fruitful bond between Adidas and Kanye West, the rapper now known as Ye. Since the first Yeezy Boost 750 shoe arrived in 2015, his Yeezy brand became a defining force in the sportswear industry and an incredibly lucrative cornerstone for Adidas.
That ended when a fierce backlash against a series of anti-Semitic comments by the musician forced Adidas to back out of the deal in October.
Now Bjorn Gulden, who took over Adidas in January, is trying to stabilize the German company, and Ye is just one of his problems. Last year, sales in China, its biggest market, fell more than 35 percent as the country extended its Covid lockdown, and the decision to withdraw from Russia after the invasion of Ukraine cost it 59 million euros (about 62 million dollars). It is also losing market share to Nike and other rivals.
On March 8, Gulden declared 2023 a “transition year,” with Adidas shifting its priorities toward traditional product lines and cutting costs, starting with cutting the dividend from the current €3.30 per share to €0.70.
At the same time, he said, the company was still trying to decide what to do with Yeezy sneakers and sportswear.
Gulden said Adidas could sell the inventory and donate the proceeds “to do something good.” He said the sneakers were most likely not destroyed.
Even as the company looks to expand its soccer, track, outdoor and golf lines, Gulden said, he’s hopeful that collaborations with influencers and stars like Beyoncé and Pharrell Williams will pick up again this year.
Adidas described Ye’s behavior as “unacceptable, hateful and dangerous, and violates the company’s values of diversity and inclusion, mutual respect and fairness.”
Breaking the deal with Ye left the company with a mountain of sneakers and clothing, resulting in a potential loss of 1.2 billion euros in sales and some 500 million euros in profit this year.
“If we sell the inventory, I promise that the people who have been hurt by this will also get something good out of this,” Gulden said. Before last year’s hoopla, Yeezy sneakers often sold for hundreds of dollars a pair.
Jewish groups have been divided on the idea of selling Yeezy stock for a good purpose.
Charlotte Knobloch, president of the Jewish Community of Munich and Upper Bavaria, warned that putting the sneakers back on the market would send the wrong signal.
“By deciding to sell West’s merchandise now, Adidas would choose to turn back the clock,” Knobloch said.
By: MELISSA EDDY
BBC-NEWS-SRC: http://www.nytsyn.com/subscribed/stories/6623114, IMPORTING DATE: 2023-03-22 00:30:09
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