Nearly two months after terminating its relationship with Kanye West, sportswear giant Adidas is trying to figure out how to sell $530 million worth of Yeezys, according to a report from the Financial Times.
The company announced it was parting ways with West, also known as Ye, on Oct. 25 citing the rapper’s antisemitic remarks and hate speech that got him suspended from social media platforms multiple times.
The London-Based newspaper reported that fears of heavy-reliance on Yeezy sneakers have circulated for years among employees.
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At the end of this year alone, Yeezys made up an estimated $1.8 billion in annual revenue for Adidas, or 7% of their totals, the Times said.
Insiders at Adidas told the paper that while some of its franchises suffered financial losses in 2019, Yeezy didn’t.
In the report, the company pushed back against such claims, noting that numbers actually rose in the fitness and basketball spheres.
The Times also reported that Yeezy and all other partnerships within the company were reviewed as part of a formal risk management process.
Furthermore, the company cutting ties with West came on the heels of multiple profit warnings, a sales plunge in China and the company’s decision to stop doing business in Russia, the paper said.
And about those shoes the company is allegedly stuck with? The Times said Adidas is trying to sell them as part of its own brand to avoid taking more financial hits.
In early November, Adidas announced that it would continue to sell West’s shoes without the Yeezy name.
“As publicly communicated on October 25, we had terminated the partnership with Ye immediately, ended production of Yeezy branded products and stopped all payments to Ye and his companies,” Adidas finance chief Harm Ohlmeyer said that month.
Adidas did not immediately respond to USA TODAY’s requests for comment about the most recent claims or what will happen to the leftover $530 million in Yeezys.
Saleen Martin is a reporter on USA TODAY’s NOW team. She is from Norfolk, Virginia – the 757 – and loves all things horror, witches, Christmas, and food. Follow her on Twitter at @Saleen_Martin or email her at [email protected].
This article originally appeared on USA TODAY: Adidas scrambling to sell $530 million in Yeezys, report says
Source: https://finance.yahoo.com/news/adidas-scrambling-sell-530-million-171748075.html