Leftover Yeezy Inventory Could Lower Adidas Revenue By Over £1 Billion

Leftover Yeezy Inventory Could Lower Adidas Revenue By Over £1 Billion

February 14, 2023
Dom Challis

Back in October 2022 when Adidas cut ties with Ye (formerly known as Kanye West), over the rapper’s antisemitic remarks, the Three Stripes label immediately faced another problem – what to do with all of its merchandise associated with Ye’s Yeezy brand.

It’s not rare for a collaboration, project and products to be subject to a spontaneous cancellation between brands. Whether it’s from dropping a partner or not aligning with a brand’s direction, many companies, even Adidas can immediately cancel partnerships.

When Adidas dropped Ye and his Yeezy line, instantly entire teams were displaced, projects were dropped and now Adidas are having to face the many effects of these actions.

In a profit warning issued on Thursday February 9, Adidas stated their decision to not sell existing Yeezy merchandise is expected to decrease the company’s full-year revenue by over £1 billion.

The news indicates that Adidas must be sitting on a massive amount of Yeezy products. When the duo initially split, Yeezy was at full-strength, dishing out regular releases and restocks. With this in mind, it’s easy to understand why Adidas has a hefty Yeezy backlog. 

Adidas‘ loss could be even greater if the German-founded company decides not to “repurpose” any of its unsold Yeezy merchandise.

Figuring out how to repurpose leftover products is a common problem within the retail industry. Experts have stated it’s a uniquely difficult position Adidas are in, to make a profit off its unsold inventory when considering the distinct design of Yeezy products and the reputational damage caused by Ye. 

If Adidas want to return some kind of profit, they could consider removing the Yeezy labels and reselling the merchandise at a discounted rate in its own stores or selling the Yeezy merchandise in smaller markets.

Whatever Adidas decide to do moving forward, destroying the merchandise would mean huge financial loss and possible backlash when they sportswear giants could donate the remaining goods.

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