Adidas reported a 6 percent gain in net sales in 2022, to €22.5 billion

Since his antisemitic comments, the singer has been dropped by several other brands he partnered with, including GAP and Balenciaga. Earlier this month, Ye tweeted a threat that he would go “death [sic] con 3” on Jewish people, alluding to a defense readiness designation used by the U.S. military. He also posted a screenshot of a text exchange with Sean “Diddy” Combs in which he suggested Combs was being controlled by Jews. Adidas reported a 6 percent gain in net sales in 2022, to €22.5 billion, but operating profit fell 66 percent, to €669 million, weighed down by its pullout from Russia and the “zero Covid” lockdowns in China, which contributed to more unsold inventory. Melt them down and turn them into Crocs? Scrape off the label and hope no one notices? Ending the Ye partnership also cost Adidas 600 million euros in lost sales in the last three months of 2022, helping drive the company to a net loss of 513 million euros. The latest move by Adidas comes nearly six months after the company cut its ties with the rapper, halting production of Yeezy products and its payments to Ye. Gulden didn’t specify which organizations would get donations, but offloading the Yeezy products will finally close the book on the once lucrative relationship between Adidas and Kanye West, now known as Ye. He cannot resell designs that he’s already been paid royalties for by Adidas outlet, Swartz said.

“They paid him big money, and they’re not going to let him take their property and sell it. If it does end up in court, Adidas would have a stronger case.” What else can be done with such a unique-looking sneaker with a design unavoidably linked to Ye? Alden Wicker, a journalist who covers sustainable fashion, says the shoes should be recycled responsibly. The company has launched products that aim toward repurposing waste, such as the Adidas Terrex Futurecraft Loop anorak, made out of recycled ocean plastic. Wicker suggests that Adidas use the Yeezys to test new projects. “It would be the perfect source material for testing, especially since Adidas knows exactly what the material composition is, and that is crucial information for the recycling process,” she said. Ye has yet to publicly comment on the latest comments from his former partner. He’s banned from Instagram and he’s not been on Parler—the platform he agreed to buy last month—nor Twitter for almost a week.

Adidas does not tolerate antisemitism and any other sort of hate speech, the company said in a statement Tuesday. “Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.” The collaboration with West may have been the most lucrative one for Adidas, but going back doesn’t seem to be an option. It has to find other ways—other celebrities—to plug the gap, which might be easier said than done. The ADL is “surprised and concerned that Adidas – a brand that supports inclusion and diversity — continues not only to support the Ye product line, but to release new products even as he continues to espouse hateful antisemitic ideas,” said Jonathan A. Greenblatt, CEO of the ADL, in a letter to Adidas CEO Kasper Rorsted and the company’s board. Adidas is withdrawing its request that the U.S. Trademark Office reject an application by Black Lives Matter to trademark a design featuring three parallel stripes. To be sure, Adidas will survive. Analysts noted Yeezy products represent only a small fraction of the roughly 300 million pairs of shoes the company sells each year. Swartz projects overall Adidas revenues to reach $23.2 billion euros ($23.1 billion) this year, with the Yeezy brand generating 1.5 billion to 2 billion euros ($1.99 billion), or nearly 10% of the total. The pricy brand accounts for up to 15% of the company’s net income, Swartz said.

Industry experts said that Adidas could sell rebranded shoes, liquidate them, donate or destroy them ― but that each option came with its drawbacks. “We sell about 30,000 sneakers in total every month. Probably 6,000 to 7,000 of those right now are Yeezys,” he said. That’s a move many sneaker collectors are trying out. On the resale site StockX, Yeezys continue to sell at pace – more than 200 pairs of bone-colored Yeezy slides have sold in the past three days, often for about three times as much as the original price ($60). Though expensive, it is significantly less than what the shoes would sell for before Adidas dumped Ye. And 150 of the shoes are listed as “below retail price” – meaning resellers are not making a profit. “We need to reduce inventories and lower discounts,” Mr. Gulden said. “Adidas has all the ingredients to be successful. But we need to put our focus back on our core: product, consumers, retail partners and athletes.” Adidas is “in a competitive industry and they haven’t exactly had their A-game for several years now,” he said. “So it does make it tough.” One of the options included simply destroying the shoes, but the company ultimately decided against it, Gulden said.