sporting goods
Adidas wants to sell Kanye West products and donate money
Adidas Yeezys are on display in a sneaker resale store. photo
© Seth Little/AP/dpa
The rapper once brought billions in sales to the Adidas group with his “Yeezy” products. Controversial statements made it intolerable. Now Adidas is making a Solomonic decision.
The Adidas group wants to continue to sell parts of the inventory of the products of the “Yeezy” series, which were launched together with rapper Kanye West, even after the separation from the controversial musician. A “significant amount” is to be donated to organizations that work against discrimination and hatred, including racism and anti-Semitism, Adidas said on Friday in Herzogenaurach.
These include the Anti-Defamation League (ADL) and the Philonise & Keeta Floyd Institute for Social Change. The resale of the first “Yeezy” products that have been on hold since October is scheduled to start in May. Whether there will be other “Yeezy” items on the market after that is initially open.
Cooperation with expensive consequences
The expensive move away from the scandalous rapper and his “Yeezy” products already caused the sporting goods manufacturer to make a loss in the first quarter. The bottom line was a minus of 24 million euros in the first three months of 2023. For the year as a whole, Adidas could close with a barely positive result because of the “Yeezy” problems, as the company already forecast in February.
“After careful consideration, we have decided to start selling a portion of the remaining Adidas ‘Yeezy’ products,” said Gulden. Selling and then donating was the preferred option for all organizations and stakeholders.
“We believe this is the best solution because it values the designs created and shoes produced, works for our employees, solves an inventory problem and will have a positive impact on our communities,” said Gulden. “Hate of any kind has no place in sport and society and we continue to fight against it.”
Anti-Defamation League supports projects
Adidas immediately received approval from the Anti-Defamation League, a US organization that has been campaigning against discrimination and defamation of Jews for decades.
“At a time when anti-Semitism has reached historic levels in the United States and is rising worldwide, we appreciate how Adidas has turned a negative situation into a very positive outcome,” said the organization’s chief executive, Jonathan A. Greenblatt. “The company has shown real prudence by partnering with community organizations dedicated to combating this vicious and persistent hatred.”
The rapper had launched expensive lifestyle products together with Adidas – a highly lucrative business for both sides. “When I was still with the competitor, I sat there with wide eyes,” said CEO Björn Gulden recently at the balance sheet press conference. “Yeezy” meant billions in sales for Adidas, especially in the USA, with a very high profit margin.
It’s about 700 million euros
After anti-Semitic statements from West and considerable pressure from outside, Adidas had to stop the cooperation and also the sale of the products. If the products still in stock had been completely destroyed, this would have reduced the annual result by up to 700 million euros.
A class action lawsuit by investors in the USA, who accuse Adidas of not reacting in time, adds to the difficulty. One could have known earlier what the risk of working with West would be. At the general meeting, some of the shareholders refused to approve the actions of the board of directors and the supervisory board.