Adidas’ breakup with Ye, is a pricey one. Due to the inability to sell the designer’s Yeezy clothes and shoes, the firm issued a warning on Thursday that it expects to lose $1.3 billion in revenue this year. Following the rapper’s antisemitic comments in October of last year, Adidas dissolved their nine-year collaboration.
Adidas said in a statement, that its financial guidance for 2023 “accounts for the significant adverse impact from not selling the existing stock.” If the company can’t “repurpose” any of the remaining Ye clothing, Adidas said that could cost the company $534 million in operating profit this year.
Adidas said that shortly after the partnership dissolved that it would try to sell the clothing, stripped of the Yeezy name and branding. Adidas said selling the sneakers under its own branding would save the company about $300 million in royalty payments and marketing fees.
Despite that attempt, Adidas is going to have problems repurposing his clothing, an analyst previously told CNN.
“There really are no good options for this distressed brand that sat somewhere between prestige and luxury,” said Burt Flickinger, retail expert and managing director at retail consultancy Strategic Resource Group.
Other options include destroying it or donating unsold Yeezy clothing.
Adidas said last year that it ended its partnership with Ye because it “does not tolerate antisemitism and any other sort of hate speech” and said his comments were “unacceptable, hateful and dangerous.” Adidas said they violated the company’s “values of diversity and inclusion, mutual respect and fairness.”
Last fall, Adidas put the “partnership under review” after Ye wore a “White Lives Matter” T-shirt in public. The Anti-Defamation League categorizes the phrase as a “hate slogan” used by White supremacist groups, including the Ku Klux Klan. He also said “I can say antisemitic s*** and Adidas cannot drop me,” during a tirade against Jews on a podcast.
