German sportswear giant Adidas could face its first annual loss in decades after finalizing their costly split with designer and rapper Kanye West, finally putting an end to the iconic Yeezy era.
Adidas are expected to take a massive hit of $1.3 billion, which was far from the the projected amount of $250 million in profit and $540 million in losses. They might get hit with more losses ahead as they predict the 2023 operating loss around $720 million.
Even though the Yeezy line amounted to 15% of its net revenue, Adidas’s decision to split with Kanye, was a result of the antisemitic comments across various media outlets and interviews, this gave other brands an opportunity to discontinue their partnership with Ye as well. Ye further ignited the beef by wearing a “White Lives Matter” tee at the Paris Fashion Week, and Adidas were clear that they do not tolerate any form of hate speech or antisemitism.
Adidas CEO Bjorn Gulden hopes to make 2023 a transitional year, to set the base and strive to be a growing and a profitable company again. He believes that Adidas has all the secret ingredients to be successful which must be re-aligned in order to make them shine, but it will take some time. He believes that one shouldn’t take decisions just to please someone, instead they should look at the bigger picture and make decisions with maximum positive outlooks.
Despite all the drama going on, third party retailers like Impossible Kicks, Cool Kicks, Sole Stage etc. are saying that the buyers haven’t been put off, instead there’s a 30% hike in the price of the shoes and apparel! People are perceiving Yeezy’s as a collector’s item, and most of the times they don’t even know that Ye is associated with the product. A pair of Yeezy 350 Zebras are going now between $340 to $360, compared to four months ago, when the price was merely $260. The reselling community stands against everything Ye said, but they feel obliged to sell it as a collectible, along with the scarcity and the limited supply.
Personally, I’m a huge Nike fan, so it doesn’t affect me, but I have lots of friends who go crazy on a pair of Yeezy’s, I feel a little sad for them as they might end up overpaying to cop a pair. But overall, it is a great decision by Adidas, no outlet should sponsor, promote and tolerate any sort of hate speech and I completely stand with them.
References:
https://www.bbc.com/news/business-64892898
https://www.xxlmag.com/kanye-west-adidas-agreement-sell-remaining-yeezy-sneakers/
https://www.npr.org/2023/03/08/1161905306/adidas-ye-kanye-west-yeezy-loss