Adidas has announced its intention to sell the remaining Yeezy sneakers from its discontinued collaboration with Kanye West, also known as Ye, at a minimum cost price.
The separation occurred in 2022 following the artist’s antisemitic social media comments.
Despite the brand’s financial setbacks due to currency fluctuations, Adidas aims to recover losses by selling the sought-after Yeezy inventory.
The German sportswear company faced challenges in 2023, with a €1 billion impact from currency fluctuations and discontinuation of the Yeezy business.
Adidas revealed that it cut prices for wholesalers to reduce excess inventory.
Despite these hurdles, the company achieved an operating profit of €268 million in 2023, expecting almost double that figure in the current year.
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Adidas CEO Bjørn Gulden, who joined in 2023 to navigate the company through the aftermath of the Yeezy breakup, mentioned the improvement in operating business and the decision not to write off €268 million of Yeezy inventory as contributing factors.
With unsold Yeezy sneakers valued at around €1.2 billion, Adidas plans to sell the remaining stock for at least the production cost, aiming to recoup losses from the formerly lucrative partnership.
However, a potential write-off of approximately €300 million for the remaining Yeezy items remains a possibility, impacting the company’s outlook.
Adidas cited the devaluation of the Argentine Peso at the end of 2023 as another factor affecting its profits.
Argentina’s President, Javier Milei, devalued the currency by over 50% in December, implementing what he called “economic shock therapy.”
The sportswear giant, a long-time provider of shirts for Argentina’s national football team, warned that the devaluation would continue to impact profits in the current year.
Rival sportswear firm Puma also acknowledged the adverse effects of Argentina’s currency devaluation on its financial results, as the region represents its largest and fastest-growing market.
