Kanye West’s Partnership with Adidas Generated Billions for Both Parties
Kanye West and Adidas first formed their partnership in 2013, and at first, it appeared to be going from strength to strength.
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So much so that in 2021, Yeezy generated $1.65 billion. This was 7% of Adidas’ overall annual revenue in that year, with West taking 11% of that amount.
Adidas and Kanye West parted ways in 2022
After Kanye West’s antisemitic comments and actions in 2022, Adidas released a statement that it would no longer be working with West.
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The company said they don’t tolerate any form of hate speech and that West’s actions were “unacceptable, hateful, and dangerous” and they violated their “values of diversity and inclusion, mutual respect, and fairness.”
Adidas Expected to Be Negatively Affected by Losing the Kanye West Partnership
As Adidas ended its partnership with Kanye West with immediate effect, this was always going to affect the company negatively.
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In their statement announcing the end of the partnership, Adidas said they expected to lose over $271 million of their overall income in 2022. They also saw a $443 million drop in sales in the first quarter of 2023.
Adidas’ Chief Executive Defended Kanye West
Just over a year after the Adidas x Yeezy partnership ended, Adidas’ chief executive, Bjørn Gulden, said that Kanye West wasn’t a bad person.
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In comments made in December 2022, West praised Adolf Hitler and the Nazis. However, Gulden then defended him. The Guardian reported that he didn’t think West “meant what he said” and that he was just coming across as a bad person, without actually being a bad person.
Demand for Yeezy Sneakers Is Still High
Despite the Adidas x Yeezy partnership coming to an end in 2022, the demand for the sneakers is still high.
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The BBC reports that they are a hugely popular product in the resale market, which could be why Adidas has decided to sell the rest of its remaining stock.
Adidas Sold Some Yeezy Stock in 2023
In 2023, Adidas decided to sell off 40% of its Yeezy stock in two batches, as it still had $1.3 billion worth of stock left after the partnership ended.
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Forbes reported that the first Yeezy batch sold four million sneakers in 48 hours, with the price for each style ranging from $70 to $260.
Adidas Selling Yeezy Stock Positively Impacted Sales
The decision for Adidas to sell off some of their existing Yeezy stock was a good one, as it positively impacted sales and is likely why Adidas decided to sell off the rest of the stock later this year.
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In a statement released by Adidas in January 2024, the company said that both Yeezy drops in 2023 had net sales of $814 million.
Sold Yeezy Products Will Not Affect Adidas’ Operating Profit
Adidas still has millions of dollars worth of Yeezy products that it is expected to sell in 2024.
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The company currently predicts that selling the rest of the Yeezy stock will not have a positive or negative effect on Adidas’ operating profit at the end of 2024. However, if they were to not sell the leftover stock, they would be operating at a loss.
Yeezy Sneakers Are Expected to Cost the Same as Before the Partnership Ended
If fans of the Adidas x Yeezy line were expecting to be able to buy the shoes at a discount, they may be feeling disappointed.
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The Daily Mail has reported that one of the first shoes expected to be sold is the Yeezy Boost 350, which is being sold for $230, the same amount as before the partnership ended.
Customers Need to Sign Up to a Raffle
With many customers expected to flock to the Adidas website to get their hands on one of the last ever Adidas x Yeezy sneakers, they have to sign up for a raffle.
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Adidas customers will have until Feb. 29, 2024, to sign up for the raffle to be in with a chance of being selected to buy some Yeezy sneakers, which will be available on the Adidas website, Adidas app, and the Confirmed app.
Remaining Yeezy Sneakers Are Worth Millions
As they still have around 60% of their Yeezy sneakers in stock, they are said to be worth millions.
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Adidas has estimated that the current stock of Yeezy sneakers they have left over is worth a total of $290 million.
Adidas Is Set to Make $720 Million from Yeezy Sales
With the $290 million Adidas will save from not throwing out its remaining Yeezy stock, the company could make just over triple that amount overall.
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Including the $430 million Adidas is set to make in the sale of Yeezy sneakers, the overall amount they will make from selling the remaining stock is $720 million.