Adidas to continue gradually releasing more Yeezy stock after earning $437 million from recent sale.
Adidas to continue gradually releasing more Yeezy stock after earning $437 million from recent sale.
Adidas Makes $437 Million From Yeezy Shoe Sales After Cutting Ties With Kanye West
Adidas has announced that it made an impressive $437 million from its first batch of Yeezy sneaker sales since cutting ties with Kanye West. This news comes as the sportswear giant continues to try and shift its remaining Yeezy stock. What’s even better is that a portion of the proceeds will be donated to organizations fighting against antisemitism.
Background and Profit
Adidas kicked off another round of Yeezy sales this week, featuring popular sneakers like the Yeezy Boost 250 V2, 500, 700, as well as the Yeezy Slide and Foam Rnr lines. The initial wave of sales helped the company post an operating profit of 176 million euros ($194 million) in its second quarter, surpassing expectations.
During the first sale, Adidas managed to sell up to a quarter of its Yeezy backlog, totaling approximately $530 million. This success followed the company’s decision to end its partnership with Kanye West, now known as Ye, in October of last year. Adidas terminated the collaboration due to the rapper’s antisemitic tweets and offensive comments on Fox News.
Change of Plans and Charitable Contributions
Initially, Adidas planned to burn the remaining Yeezy stock. However, they changed their strategy and instead decided to sell the sneakers, utilizing the profits for “substantial donations” to charitable organizations combating antisemitism and other forms of racism.
In a financial statement, CEO Bjørn Gulden mentioned that the company would support groups such as the Anti-Defamation League, the Philonise & Keeta Floyd Institute for Social Change, and Robert Kraft’s Foundation to Combat Antisemitism. Though the exact proportion of sales allocated for donations was not disclosed, Gulden emphasized that this solution was significantly better than simply destroying the inventory.
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This decision by Adidas was well-received by former Yeezy Chief Operating Officer, Udi Avshalom. The charitable donations not only highlight the company’s commitment to social causes but also provide a positive way to utilize the remaining Yeezy stock.
Financial Relief and Continued Sales
The successful Yeezy sales have alleviated financial pressures for Adidas. As a result, the company’s anticipated annual loss has dropped from the forecasted $764 million in March to $491 million.
Aligned with CEO Gulden’s pledge to gradually sell off the existing Yeezy inventory, a second batch of Yeezy sneakers was released this week. Fans of the brand can anticipate more drops throughout August, as Adidas continues to manage its leftover stock.
Adidas’ ability to achieve substantial profits while supporting charitable causes proves that a change in strategy can yield positive outcomes. By cutting ties with Kanye West and leveraging the popularity of Yeezy sneakers, the company has not only rejuvenated its financial position but also made a meaningful impact in the fight against antisemitism and racism.