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. The sale of the first “Yeezy” products is scheduled to start in May. Whether there will be other “Yeezy” items on the market after that is initially open.
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. The current decision has no direct impact on the well-known financial outlook, it said on Friday.
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.
Adidas expects a loss of 500 million euros
After anti-Semitic statements by West, Adidas had to stop working together. If the products still in stock were completely destroyed, this would burden the annual result with 700 million euros. In the event of the sale and donation of the proceeds, Adidas still assumes a loss of 500 million euros. At least the costs for the destruction of 200 million euros would be saved.
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. (dpa)