Back in March 2022, Kanye West and Adidas appeared to have agreed to sell $500 million worth of Yeezy stock. However, as of February 27, 2023, rumors have surfaced that Adidas has signed a new agreement with West to sell the remaining $500 million worth of Yeezy stock. This new partnership will end once all unsold Yeezy products have been sold. At the time of writing, neither party has confirmed the rumor officially.
Adidas is currently reviewing options for utilizing Yeezy inventory following the end of its partnership with West. The unsold stock has had a significant adverse impact on their finances. They expect to suffer a loss of approximately €1.2 billion ($1.29 billion) in revenue and €500 million ($537 million) in operating profits this year. For a strategic company review, the company anticipates a one-off cost of almost €200 million in 2023.
Adidas CEO Bjørn Gulden has acknowledged that the company is not performing as it should, and 2023 will be a year of transition to set the base for the company to grow and be profitable again.
On February 2, 2023, Adidas announced the end of its collaboration with Kanye West and the closure of the Yeezy Supply website. Adidas asserts that Kanye West’s actions have contradicted the company’s principles of promoting diversity, inclusion, mutual respect, and fairness. Adidas is the partner in charge of owning the Yeezy designs, and they are the only ones who have the rights to all the existing products and any previous and new color variations.
West’s recent media tirade has resulted in significant public outcry, including a Change.org petition that received over 169,000 signatures asking Adidas to cancel its relationship with him. Adidas has decided to terminate its partnership with West immediately, end production of Yeezy branded products, and stop all payments to West and his companies. This decision is expected to have a short-term negative impact of up to €250 million on the company’s net income in 2022, given the high seasonality of the fourth quarter.
Adidas does not tolerate hate speech or any form of antisemitism, and West’s recent comments and actions have been deemed unacceptable, hateful, and dangerous.
The termination of Adidas’ partnership with West is significant for both parties. Adidas will no longer benefit from the significant sales generated by Yeezy branded products, which have been one of the most significant contributors to the company’s revenue in recent years. On the other hand, West will need to find a new partner to produce and sell merchandise.
Furthermore, Adidas’ decision to terminate its partnership with West highlights the importance of maintaining brand values and ethics. The company has taken a stand against hate speech and antisemitism, demonstrating its commitment to diversity, inclusion, and mutual respect. This decision could lead to a significant loss of revenue for Adidas, but it also reinforces the importance of standing up for rights.