100 Million Euros Donated to Anti-Semitism Combat Organization
Adidas Plans Second Stock Sale This Month
German sports brand Adidas sold collaboration products with American hip-hop star Ye (formerly Kanye West) that had been piling up in inventory, generating sales of 400 million euros (about 570 billion won) and successfully clearing some of the stock. Adidas, which had to bear nearly 2 trillion won in inventory after suspending the collaboration last year due to Ye's anti-Semitic remarks, breathed a sigh of relief.
According to the AP News and others on the 3rd (local time), Adidas announced in its earnings report that it achieved sales of 400 million euros and an operating profit of 150 million euros from the sale of 'Yeezy' sneakers, the collaboration product with Ye. Following this incident, Adidas had previously donated 10 million euros to civic groups fighting anti-Semitism and promised to donate an additional 100 million euros from these profits.
In October last year, Adidas ended its long-standing collaboration with hip-hop star and fashion brand hitmaker Ye. The relationship was severed as Ye caused controversy by making anti-Semitic and Nazi-sympathizing remarks. At that time, since Ye's Yeezy brand accounted for a large portion of Adidas's revenue, there were many predictions that the company would suffer enormous losses.
In fact, Adidas expected that if the inventory were to be discarded, sales this year would decrease by 1.2 billion euros and operating losses would reach 500 million euros. The company deliberated for months on whether to resell the inventory, discard it, or sell products with the logo removed. Ultimately, Adidas decided in May to resell the inventory and began selling some in June.
Various disturbances occurred during this process, but unexpectedly, the clearance of Yeezy sneaker inventory was a success. Adidas explained that it sold all the planned inventory within weeks of starting sales. The New York Times (NYT) analyzed this as "meaning that despite public outrage over Ye's remarks, Yeezy sneakers remain popular."
Adidas CEO Bjørn Gulden stated, "The first sale of Yeezy sneaker inventory helped us this quarter." He also mentioned that Adidas is still in legal discussions with Ye regarding Yeezy sneaker sales but did not disclose how much profit Ye received related to this.
Adidas plans to launch a second inventory sale within this month. CEO Gulden said that about 20-25% of the total inventory was sold in the first sale. Foreign media reported that the highest-priced Yeezy sneakers were sold out in the first sale. The market expects that popular products such as Yeezy Boost 350 V2 will be included in the second sale, but it is uncertain whether it will sell out as in the first sale.
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