Demand for Yeezy sneakers is still so high that Adidas was able to recover more than half a billion dollars by selling some of the stock it was keeping in storage.
Adidas cut ties with Kanye West, the rapper now known as Ye, in October after he publicly made a series of anti-Semitic remarks.
The company had been selling Yeezy sneakers—shoes designed by Ye and sold under the Adidas label—since 2015.
Dropping Ye meant the end of a lucrative partnership for the sports apparel maker, with the breakup costing Adidas €600 million (about $630 million) in the final quarter of 2022 and contributing to the company’s first annual loss in more than three decades.
The abrupt end of its relationship with Ye also left Adidas with $1.3 billion of unsold Yeezy stock, raising questions about sustainability and whether the company would need to absorb the cost itself.
Adidas eventually decided it would sell some of the unsold inventory, with CEO Bjørn Gulden ruling out donating or destroying the products it was keeping in storage.
In its first sale of Yeezy products since the end of its partnership with Ye, the company reportedly recouped close to half of the costs that arose from hoarding the unsold stock.
The Financial Times reported on Monday that demand for the sneakers exceeded the company’s most optimistic projections, with an online sale held between late May and early June raising more than half a billion dollars.
Citing sources close to the matter, the FT said that by June 2—toward the end of the sale—Adidas had received orders worth €508 million ($563 million) for 4 million pairs of Yeezys.
The unnamed sources also told the publication that Adidas was not able to meet demand for all of the orders it received, particularly for certain sizes and styles.
A spokesperson for Adidas declined to comment on the report when contacted by Coins2Day.
Ye reputation
Ye’s well-documented anti-Semitism and tattered reputation have created more headaches for Adidas than just an oversupply of unsold sneakers.
Late last year, the company was forced to launch an internal probe into allegations that it turned a blind eye to a “toxic” culture of porn, bullying, and mind games at Yeezy.
More recently, Adidas alleged that Ye had “mishandled virtually all” of a $100 million-a-year marketing fund designated to Yeezy.
Meanwhile, Adidas shareholders launched a class action lawsuit against the company in May, arguing that the firm had been aware of Ye’s problematic behavior for years and failed to reduce their exposure to financial risk.
Adidas’s share price plummeted in February after it issued a warning over unsold Yeezy inventory.
Despite the financial turmoil caused by going separate ways with Ye, Adidas wasn’t the only corporation to sever ties with the hip-hop artist following his offensive rhetoric.
Balenciaga, Gap, and JPMorgan Chase also ended their associations with the Grammy-winning musician last year.
While the corporate world turned its back on Ye, however, Yeezy fans continued to be invested in the brand, with surging demand sending the price of Yeezy resales as high as $400 a pair.
Despite lingering demand for Yeezys and the success of its recent sale, however, Adidas won’t be netting all of the reward.
The German sportswear giant pledged to donate at least some of the proceeds from any Yeezy sales to charities working on tackling racism and anti-Semitism, although it is unclear what proportion of the proceeds will be donated.
Adidas had previously forecast a full-year loss of €700 million ($777 million) for 2023 before announcing its plans to sell some of the unsold Yeezy stock.