After Cutting Ties With Ye adidas Is Stuck With $530 Million In Yeezy Product

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Yeezy Boxes Piled Up (Image via Alex Haney | Unsplash)
Yeezy Boxes Piled Up (Image via Alex Haney | Unsplash)

Arguably the biggest story to hit the sneaker world in 2022 (though others would say Zadeh Kicks), Ye (FKA Kanye West) and adidas’ relationship deteriorating to the point that the two are no longer partners has put a serious void in the sneaker market - both for adidas and those who participate in the aftermarket. Rightfully so, adidas severed the business relationship with Ye following months of antics including harassing Three Stripes board members, the infamous “White Lives Matter” tee at his Season 9 fashion show, and most horrendously spouting hate speech against the Jewish community. Getting rid of the toxicity brought forth by Ye was great both in a PR sense and for the morale of the brand's employees, however, the German sportswear giant took a giant financial hit.

We’ve previously reported on the financials of the dissolution of adidas/Yeezy as the line was raking in nearly $2 billion in revenue for The Three Stripes (around 7% of the entire revenue for adidas A.G.) and would have been a huge push for the label this holiday season to meet sales goals. The partnership ending so abruptly forced adidas to take back pairs of Yeezys from retailers who had received allocations for upcoming releases and left them with warehouses full of product that was useless. In a report from the Financial Times, the amount of Yeezy sneakers piled up at adidas totals over half a billion dollars.

All of this inventory won’t go to waste, however, as adidas’ plans to push out non-Yeezy branded sneakers will begin after we ring in the New Year and start with the adidas 350 V2 “Granite.” Financially it makes sense as all that adidas needs to do is swap out insoles and replace packaging, sell the products at their typical retail price, and save money by not having to give Ye his 15% cut.

Rhetoric online suggests that many consumers are not happy with adidas’ decision, and breaking it down further, if you purchased Yeezys because of Ye why would you buy the non-branded version? Inversely, the silhouettes will still be associated with Ye by the general public even if his name and brand are no longer printed on the sneakers, so those who have a hatred for him will not spend their money on the product.

Dipping share prices alongside the financial burden of losing Ye will be a challenge for incoming CEO Bjørn Gulden who has overseen rivals Puma for the last 9 years. We’ll have to keep our eyes peeled for what other strategies The Three Stripes will employ going forward. For more updates regarding adidas’ challenging 2023 and more in the sneaker and streetwear world, keep it locked to our Twitter and the Sole Retriever mobile app.

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