April 15, 2024

An array of legs with various adidas and Yeezy models on their feet

Dancing around the Yeezy problem.
Photo: Paul Marotta (Getty Images)

Adidas has spent a lot of time over the last year and a half going back and forth about what it wants to do with all its Yeezy sneakers. Though the rapper’s tendency to occasionally drop off-color remarks like “slavery was a choice” was long a PR headache, it was his 2022 full heel turn — wearing a “white lives matter” shirt a fashion shows, publicly harassing his ex-wife, terrorizing fashion editor Gabriella Karefa-Johnson, forcing Adidas executives to watch porn with him — that finally forced the company to part ways with him. Reputation-wise, the move made perfect sense. Business-wise was another story.

At the time, Yeezy sneakers were contributing 8% to the Adidas bottom line. And they had a lot of inventory, some $1.3 billion in revenue tied up in the shoes. So the company tried to figure out some options:

Though Adidas did donate quite a bit of its Yeezy money to charity last year, it also donated some to its piggy bank: The company said in its latest annual report (pdf) that “the sale of remaining Yeezy product in the second and third quarter positively impacted adidas’ operating profit by an incremental amount of around 300 million [euros] during 2023.”

Still, currency losses, a €200 million strategic review initiated by new CEO Bjørn Gulden, and that charity donation conspired to hand the company its first full-year loss since 1992.

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