After parting ways with musician and fashion designer Kanye West, Adidas made millions on the first “drop” of Yeezy trainers.
Between April and June of this year, sales of the shoes were recorded at €400m (£344m) by the sportswear company.
After West, also known as Ye, made several anti-Semitic statements on social media in November, Adidas severed connections with him.
It has promised to provide a portion of the revenues to anti-hate organizations.
However, the resale market for Yeezy shoes shows no signs of slowing down, and the demand for these sneakers shows no signs of abating.
In the most recent financial report, Adidas CEO Bjorn Gulden stated that the company would “continue to carefully sell off more of the existing Yeezy inventory.”
Although he conceded that the transaction improved the company’s “general financial strength,” he insisted that it was “much better than destroying and writing off the inventory.”
The company’s predicted loss for the year dropped from €700 million to €450 million as a result of the high demand for Yeezys.
The Yeezy brand’s sales were comparable to those recorded in the same period in 2022, before the scandal received widespread media attention.
Moreover, in the wake of Kanye West’s online comments, Adidas allotted €110 million for charity gifts to organizations like the Foundation to Combat Anti-Semitism and the Anti-Defamation League.
Adidas estimated in May that it still had roughly €1.2 billion in unsold Yeezy shoes in inventory from when the collaboration was still profitable.
On Thursday, it warned that it could lose nearly €400m if it did not sell the remaining inventory.
The recent second release of the trainers is expected to offer it a significant cash boost, which was not reflected in its most recent results.
On Wednesday, JD Sports announced that it had begun selling Yeezy merchandise from the second drop by the German sportswear company.
Sales of remaining Yeezy inventory are “a short-term solution for a brand that has lost some of its identity and relevance in the market,” according to Alice Price, associate fashion analyst at research firm GlobalData.
According to her, Adidas is falling more and further behind rivals like Puma, which she claimed offered more stylish and forward-thinking offerings.
Adidas is being sued by investors who allege the company knew about Kanye West’s troublesome behavior years before it stopped their partnership, despite Mr. Gulden’s best efforts to restore order to the chaos.
Investors claim Adidas did not do enough to prevent losses and protect their money.
Adidas had previously stated that it would take “all necessary measures to vigorously defend ourselves against them” in response to “these unfounded claims.”
