2023-08-03 14:48:40
The partnership with Kanye West has been terminated after the scandal rapper’s anti-Semitic statements. The sale of the remaining stocks from the shoe cooperation gives Adidas a high demand.
Herzogenaurach.
Chunky shoes or stylish sneakers: Opinions differ about the shoes from the cooperation between Adidas and US rapper Kanye West – also for political reasons. The controversial artist was heavily criticized for anti-Semitic statements.
After considerable external pressure, Adidas ended the cooperation in October and stopped selling the products of the “Yeezy” series. In the meantime, however, the Franconian sporting goods giant is doing business with the sale of the remaining stocks – and has announced that it will be able to throttle the expected annual loss in addition to a considerable donation from the sales proceeds.
Shoes worth hundreds of millions of euros
After the end of the cooperation, the company initially sat on shoes worth hundreds of millions of euros. The common practice of destroying leftover stocks has been heavily criticized by the public due to its lack of sustainability. A destruction would have burdened the annual result alone with 700 million euros.
The expensive move away from the scandalous rapper and his products has already caused the sporting goods manufacturer to lose millions in the first quarter alone. The new Adidas boss Bjørn Gulden decided in the spring to sell the products. Because of the hesitation, another difficulty is a class action lawsuit by investors in the USA, who accuse Adidas of not having reacted in time.
Adidas was ‘a bit hesitant’
Communications expert Thomas Koch also says that Adidas was “a bit hesitant” to part with West. “Yeezy” meant billions in sales for Adidas, especially in the USA, with a very high profit margin.
“Positive transfer effects are hoped for from star cooperations, one wants to benefit from their charisma and hopes that this will be transferred to the brand,” says Koch, who researches corporate communications at the Johannes Gutenberg University in Mainz. However, there is also a risk for the companies that there could be negative transfers – as in the Kayne West case.
“Adidas is initially taking the standard route of initial crisis response and is asking for a little more time,” says Koch. According to studies, it is often enough for customers “to say we are against racism, against discrimination, we are for equality”.
It is a successful strategy to position yourself clearly on socially relevant issues, “which Adidas also does in relation to racism,” emphasized Koch. There was no other way out of the dilemma, so reselling was the best decision, especially if the amount donated was substantial, he said. “It’s a way of trying to buy your freedom a bit.”
Business figures are expected
The business figures for the second quarter are expected today. The company in Herzogenaurauch had already announced on Monday that the expected loss after the first “Yeezy” sales for 2023 should be lower. Adidas expects a negative operating result of 450 million euros for the year, after an initial estimate of 700 million euros. Depreciation on the remaining “Yeezy” stock is seen at 400 million euros, 100 million euros less than before.
A second round of sales for “Yeezy” products started on Wednesday. It was “exclusively existing stock,” said a spokeswoman for the company on request. The company did not want to say whether the sale will continue after that, should there be any remaining stock.
Interested in limited items
Cooperation with West has brought a wide range of models since 2015. Wearing them “was also a status symbol,” explains sneaker expert Phillip Kassel, who collects and trades exclusive sneakers.
What motivates buyers to still want to buy the high-priced goods even after the scandal? The “Yeezys” are very comfortable, but “it’s primarily about the resale price,” says Kassel. “Even if it’s because of controversy, I’m interested in the fact that the object is limited.” He still remembers the times when Kanye West had a cooperation with the sports manufacturer Nike: People camped in front of the shops for days to get the shoes – the quantities were very limited.
Corporate communications expert Koch explains that because of the shortage of the goods, customers know that it could be the last opportunity to get hold of the shoes.
Following the sales round, the sporting goods manufacturer wants to donate “a significant amount” to organizations that fight discrimination, hate, racism and anti-Semitism, according to the company spokeswoman. The company did not provide any information on the amount of sales proceeds and donations before the half-year figures were published. (dpa)
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