Adidas has initiated the sale of sneakers that were collaboratively designed with the artist formerly known as Kanye West, referred to as Ye, prior to the German sportswear company severing ties with the renowned celebrity.
Adidas has expressed its commitment to donate a significant portion of the proceeds generated from the remaining inventory of the “Yeezy” brand sneakers to organizations dedicated to combatting antisemitism, racism, and hate.
The Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, founded by George Floyd’s brother, are among the organizations set to receive donations from the proceeds.
This initiative comes after Adidas terminated its partnership with Ye in October, following a series of antisemitic statements made by the artist.
The distribution of profits to Ye from the sale of these shoes remains uncertain. Currently available in the United States, the price range for these sneakers spans from $70 to $260 per pair.
Adidas has emphasized that it took various perspectives into consideration during the decision-making process for the unsold merchandise. The company sought input from a diverse range of employees, organizations, and consumers.
Despite the termination of the partnership, Adidas fulfilled its production orders as planned in order to support its supply chain partners.
Back in February, Adidas projected that the non-sale of existing Yeezy merchandise would result in a reduction of approximately $1.28 billion in the company’s annual revenue, with an operating profit decline of $533 million.
In the first quarter alone, Adidas experienced a sales decrease of nearly $440 million due to discontinuing the Yeezy business.
Yeezy Brand Sneakers Now Available for Purchase
In April, investors announced their intention to sue Adidas, holding the company responsible for being aware of Ye’s problematic behavior long before the partnership was severed. These investors argue that Adidas should have taken action earlier. In response, Adidas refuted the allegations.
The impact of Adidas selling off the remaining inventory of “Yeezy” brand sneakers and donating a significant portion of the proceeds to organizations fighting against antisemitism, racism, and hate can be summarized as follows:
Financially, the sale of the sneakers allows Adidas to recoup some of its investment and potentially mitigate the financial losses resulting from the termination of the partnership with Ye.
The funds generated from the sale and subsequent donation could help offset the revenue decline caused by discontinuing the Yeezy business.
In terms of brand image and reputation, Adidas’ decision to donate proceeds to worthy causes can enhance its brand image and reputation. By taking a stand against discrimination, the company signals its commitment to social responsibility.
This move may resonate positively with consumers who appreciate brands that align with their values and could attract new customers who value Adidas’ dedication to social issues.
Addressing controversy promptly and decisively, Adidas demonstrates its commitment to tackling problematic behavior.
The swift termination of the partnership in response to Ye’s antisemitic remarks helps preserve the company’s reputation and mitigates potential backlash. It conveys that Adidas values integrity and does not tolerate hate speech.
By fulfilling committed production orders even after ending the partnership, Adidas supports its supply chain partners. This decision safeguards relationships and ensures the stability of the supply chain.
It showcases Adidas’ responsibility and commitment to its business partners, fostering trust and cooperation in the industry.
Adidas has commenced the sale of sneakers developed through a collaboration with Ye, formerly Kanye West, prior to their separation from the artist.
The company has pledged to donate a significant portion of the proceeds from these sales to organizations fighting against antisemitism, racism, and hate.
While the allocation of profits to Ye remains uncertain, the sneakers are currently available for purchase in the U.S. Adidas made the decision after consulting with various stakeholders and proceeded with fulfilling production orders to support its supply chain partners.