Adidas brings in $437 million from selling Yeezy shoes that will benefit anti-hate groups
By David Mchugh, The Associated Press on August 3, 2023.
FRANKFURT, Germany (AP) – Adidas brought in 400 million euros ($437 million) from the first release of Yeezy sneakers left over after breaking ties with Ye, the rapper formerly known as Kanye West, as the German sportswear maker tries to offload the unsold shoes and donate part of the proceeds to groups fighting antisemitism and other forms of hate. The first batch of shoes sold in June helped the company reach an operating profit of 176 million euros in the second quarter, better than it originally planned, Adidas said in a statement Thursday. After Ye’s antisemitic and other offensive comments led the company to end its partnership with the rapper in October, Adidas has sought a way to dispose of 1.2 billion euros worth of the high-end shoes in a responsible way. “We will continue to carefully sell off more of the existing Yeezy inventory,” said CEO Bjørn Gulden, who took over in January. Adidas said it sold out the first batch of Yeezy shoes and launched a second release on Wednesday. “This is much better than destroying and writing off the inventory and allows us to make substantial donations to organizations like the Anti-Defamation League, the Philonise & Keeta Floyd Institute for Social Change and Robert Kraft’s Foundation to Combat Antisemitism,” Gulden said. Several Jewish civic leaders contacted by The Associated Press said they weren’t planning to buy a pair of Yeezys themselves but generally welcomed the plan to support anti-hate organizations, saying the company is trying to make the best of a bad situation. The Adidas chief executive added that the Yeezy sales are “of course also helping both our cash flow and general financial strength.” The blow-up of the Ye partnership put Adidas in a precarious position because of the popularity of the Yeezy line, and it faced growing pressure to end ties last year as other companies cut off the rapper. Adidas said it now expects to report an operating loss of 450 million euros this year instead of 700 million euros. Yeezy revenue from June were “largely in line” with sales seen in the same April-to-June period last year, Adidas said. Adidas has not said how many shoes it is selling or whether Ye is receiving royalties from the sales. It has only said that “we will honor our contractual obligations and enforce our rights but will not share any more details.” 11-10
