Adidas intends to sell the remaining stock of Yeezy sneakers from its discontinued collaboration with Kanye West, at a minimum of the production cost.
The company along with other major brands, severed ties with the musician and fashion designer, also known as Ye, in 2022 following his series of antisemitic remarks on social media.
Although the partnership ended, the demand for Yeezy sneakers remains strong, especially in the resale market. Yeezy-branded shoes were one of Adidas' most profitable product lines, generating approximately 1.3 billion dollars in revenue in 2022.
Initially considering writing off the remaining Yeezy inventory, Adidas opted to sell the products through releases on its website and app, resulting in net sales of 810 million dollars (750 million euros) last year.
The discontinuation of the collaboration is projected to reduce Adidas' revenue by 540 million dollars in 2023. The company's finances were impacted by the discontinuation of the Yeezy business and the reduction of prices to clear excess inventory, according to a statement by Adidas.
Adidas now plans to sell the remaining Yeezy stock at production cost to recover losses from the previous profitable collaboration. The sportswear giant aims to sell the remaining Yeezy footwear inventory, valued at approximately 324 million dollars (300 million euros), at a cost to generate around 270 million dollars. The company also cautioned that its profits would continue to be affected by the devaluation in the current year.(DPA)