After Adidas’ Split With Ye, They Are Stuck With $530 Million In Inventory

Ye has managed to stay out of the headlines for the last couple of weeks, but he’s back again, well, sort of, as reports have shown after Adidas’ split with Ye, they have over half a billion in Yeezy products already produced without an actual path of moving it

As the Financial Times reported, some previous Adidas executives have stated that Adidas has relied too much on the “Yeezy Cash Cow” as other product lines were not growing as expected even before the pandemic. Adidas hasn’t been able to turn its product lines into stable profit growth. Although Adidas pushed back against such claims, saying numbers actually grew in the fitness and basketball lines.

Yeezy was the only Adidas product line that wasn’t affected by the 2019 slowdown and even through the pandemic. “It was the only product moving,” stated someone knowledgeable about the situation. Since the brand was doing so well, Adidas started moving Yeezy into more markets and releasing more models and higher stock numbers.

From 2019 to the time Adidas parted ways with Ye in October 2022, the Yeezy brand had grown twofold and started delivering €1.7 billion in annual income, or 7% of the group’s total. As the Financial Times Reports, Adidas didn’t let their investors know how reliant they were on just the Yeezy Brand alone. Adidas has tried to grow other product lines with more celebrities like Pharrell Williams, Beyoncé, and now Jerry Lorenzo. Yet none of these product lines come close to what the Yeezy brand has done in just a few years.

It adds insult to injury with Adidas not being able to sell anything in Russia due to them invading Ukraine. A place where they held the top spot in that market. With sales down in China, it seems like it is falling apart for the German Sportswear Brand. To prevent a costly loss, Adidas is currently holding onto unsold Yeezy shoes worth more than €500 million in potential income and is desperately trying to figure out how to sell them under its brand.

As we have recently shown, what will likely be their first “Yeezy” release without Ye in the Granite 350 V2. They have already switched the official images from the usual tan background Yeezy has used for just about its whole run. They now have the official photos in the same look as any regular Adidas release to fit more in line with the Adidas brand. But If social media is any preview of how Yeezy fans will react to Adidas releasing Yeezys without Ye, it’s not looking good for Adidas. Yeah, some people say they love the shoes no matter what. Still, it’s overwhelmingly in the favor that most Yeezy fans have already moved on if Ye is out of the picture and would rather wait likely a couple of years to see what Ye comes out with either on his own or if he teams up with another sneaker brand.

Make sure to keep it locked to all our social media channels to stay up to date on all things Yeezy and updates on all upcoming sneaker brands.

Source: Financial Times

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