Adidas, the German sportswear giant, has generated €400 million from the initial release of Yeezy trainers following its decision to sever ties with the rapper formerly known as Kanye West, who now goes by the name Ye. In an effort to offload the remaining unsold shoes, Adidas plans to donate a portion of the proceeds to organizations combating antisemitism and other forms of hate. The sale of the first batch of shoes in June contributed to Adidas’ operating profit of €176 million in the second quarter, as stated in a company announcement.
After terminating its partnership with Ye in October due to his antisemitic and offensive remarks, Adidas has been seeking a responsible method for disposing of €1.2 billion worth of high-end Yeezy shoes. “We will continue to carefully sell off more of the existing Yeezy inventory,” said Bjorn Gulden, the chief executive who assumed the position in January. Adidas confirmed that the first batch of Yeezy shoes sold out and subsequently launched a second release on Wednesday. Gulden expressed his satisfaction with this strategy, stating, “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.”
While several Jewish civic leaders contacted by The Associated Press stated that they did not plan to purchase a pair of Yeezys themselves, they generally welcomed Adidas’ plan to support anti-hate organizations. They believe the company is attempting to make the best out of a difficult situation. Gulden acknowledged that the Yeezy sales are beneficial for Adidas’ cash flow and overall financial strength.
The dissolution of the partnership with Ye placed Adidas in a precarious position given the popularity of the Yeezy line. The company faced mounting pressure to sever ties with the rapper last year as other companies did. Adidas now expects to report an operating loss of €450 million this year, a significant improvement from the previously projected €700 million. Yeezy revenue from June was “largely in line” with sales during the same period last year, according to Adidas. The company has not disclosed the number of shoes being sold or whether Ye is receiving royalties from the sales, only stating that they will honor contractual obligations without providing further details.