Adidas, the German sportswear brand, has experienced an unexpected turnaround in its financial performance, thanks to soaring sales of leftover Yeezy sneakers following the termination of its collaboration with rapper Kanye West over his anti-Semitic outbursts. The company revealed that the sales of four million pairs of Yeezy trainers generated an impressive $562 million during an online sale in June, far surpassing expectations.
In October last year, Adidas decided to stop selling Yeezy sneakers and ended its partnership with Kanye West following a series of anti-Semitic comments made by the rapper. However, faced with a significant inventory of Yeezy shoes, the company chose to sell off the remaining stock rather than write it off, which would have amounted to a financial blow of 500 million euros ($553 million).
The unexpected success of the Yeezy sales has helped Adidas reduce its operating loss this year to 508 million euros ($498.56 million). Additionally, the company plans to donate a significant portion of the sales to charities tackling racism and anti-Semitism, highlighting their commitment to addressing these important issues.
Investors are hopeful that Adidas’ CEO, Bjorn Gulden, can steer the brand towards a brighter future after a tumultuous split with Kanye West. While group revenue for the second quarter declined by 5 percent, the company’s gross margin rose to 50.9 percent. Furthermore, Adidas’ decision to drop West was influenced by his increasingly erratic behavior and offensive statements, leading to a fall from grace in the public eye.
Despite the controversies surrounding Kanye West, the popularity of Yeezy shoes remains strong, with high demand even after the split. The unexpected success of the Yeezy sales has not only helped Adidas recover from financial losses but also provided hope for potential future drops of Yeezy products.
As the brand continues to rebuild and redefine its direction, Adidas looks towards a promising future with renewed optimism.