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Why It Matters: Adidas is attempting to address a public relations issue.
Adidas generated significant social media buzz after posting Yeezy Boost 350 V2 sneakers, which come in black or two-toned red and gray, for sale on its website for 200 euros each. These sneakers continue to remain popular among consumers, despite Adidas’s relationship with Ye. The shoes were available for purchase starting Thursday.
Adidas stated that its decision to sever ties with Ye resulted in the company losing €1.2 billion in sales and €500 million in profit this year.
Adidas initially considered disposing of the inventory through options such as burning the products or donating them to those in need. Mr. Gulden referred to figuring out what to do with the remaining stock as “one of the most difficult decisions that I have been a part of.”
Despite its association with Ye, Yeezy shoes are known to sell for up to $1,000 per pair and remain popular. As a result, Adidas made the decision to sell the remaining stock in coordination with groups including Black Lives Matter and the Philonise & Keeta Floyd Institute for Social Change, which is run by Philonise Floyd, George Floyd’s brother.
Chief Executive of the Anti-Defamation League Jonathan A. Greenblatt, among several groups that will receive the proceeds of the sale, praised Adidas’s decision as a resolution fitting the complexity of the issue.
However, other groups pointed out that Ye would still profit from the sales, despite Adidas’s pledge to donate the proceeds. Adidas declined to comment on the exact amount Ye would receive, but Gulden previously stated that Adidas was obligated to honor Ye’s royalty contract.
Josef Schuster, president of the Central Council of Jews in Germany, commended Adidas’s willingness to donate the proceeds but added that it was “highly problematic” that Kanye West would financially benefit from the sale.
Background: An end to a highly lucrative partnership.
The Yeezy brand had become a defining force in the sportswear industry and a cornerstone of Adidas’s revenue. The collaboration between the rapper and the German-based company was considered the most successful athletic apparel partnership since Michael Jordan joined forces with Nike.
However, last fall, Ye’s controversial statements targeting Black people, Jewish people, and others resulted in a public uproar. Adidas faced criticism for not taking action after other companies ended their relationships with the artist.
What’s Next: Additional Yeezy styles may be put up for sale.
In addition to the two styles currently up for sale, Adidas’s website displays images of a dozen other models, indicating that more may be released in the coming weeks.
Adidas has stated that it is contemplating additional releases of the remaining Yeezy inventory but has not provided a specific timeline. Customers may register for updates by downloading an app.
