Adidas recently disclosed that it generated 400 million euros (approximately $437 million) in sales from Yeezy sneakers during the last quarter. These sales were a result of the company liquidating its remaining inventory after terminating its partnership with rapper Kanye West, known as Ye. Adidas made this decision in response to public pressure, following a series of antisemitic remarks made by the rapper.
As a part of its commitment, Adidas has already donated €110 million from the proceeds to organizations working against hate and antisemitism. The company has further pledged an additional €100 million, according to a recent statement.
The impact of Yeezy sales on Adidas’s financial performance has been significant. The revenue from Yeezy sneakers contributed €150 million to Adidas’s operating profit for the first half of the year. However, the overall operating profit for the first half of 2023 was €236 million, down from €828 million in the same period last year. This 70 percent decline was attributed to one-time expenses related to a strategic review, as well as the donations and accruals for future donations.
Adidas did not provide a forecast for the potential revenue generated from the ongoing effort to sell the remaining Yeezy inventory. The company began selling its first batch of remaining Yeezy shoe models in June, and they were sold out within a few weeks.
The sale of Yeezy sneakers has been critical for Adidas in resolving a $1.3 billion inventory issue following the termination of the collaboration with Kanye West. Despite the controversy surrounding the rapper’s remarks, the revenue from Yeezy sneakers shows that the line remains popular and profitable for Adidas.
Adidas has also confirmed that it is honoring all remaining legal obligations with Kanye West, even though they no longer have a contract. However, specific details about the rapper’s earnings from the sales have not been disclosed, and Adidas and Kanye West continue to engage in legal discussions.
The process of selling the Yeezy inventory is ongoing, with a second batch of sneakers and slides recently hitting the market. Adidas plans to release more of the remaining inventory throughout the year. While some of the most valuable styles were sold in the first release, the company expects the subsequent releases to bring in varying levels of revenue.
A notable aspect of this sales initiative is Adidas’s commitment to donating a portion of the proceeds to various organizations. The company has set aside €110 million from the first sale to be donated to several groups, including the Anti-Defamation League, the European Jewish Association, and the Philonise & Keeta Floyd Institute for Social Change. Discussions have also been underway with Robert K. Kraft, the owner of the New England Patriots, regarding his foundation’s fight against antisemitic speech. Square blue pins, the foundation’s logo, will be attached to all Yeezy sneakers sold directly in North America by Adidas.