In a strategic move to recover losses after cutting ties with renowned rapper and fashion designer Kanye West in 2022, Adidas has revealed its intention to sell the remaining stock of Yeezy sneakers at least at cost price.
The decision comes as the German sportswear giant faces financial challenges, with currency fluctuations causing a significant impact on its bottom line.
Despite the discontinuation of the Yeezy business, demand for the iconic sneakers remains robust, particularly in the resale market.
Adidas, acknowledging the enduring popularity of Yeezy, aims to capitalize on this by offering the remaining inventory to consumers at a price reflecting the cost of production.
Adidas CEO optimistic about turnaround
Adidas CEO, Bjørn Gulden, appointed in 2023 to navigate the brand through the aftermath of the Yeezy breakup, expressed optimism about the company's financial outlook.
Despite the challenges, Adidas posted an operating profit of €268 million in 2023 and anticipates nearly doubling that figure this year. The improved performance is attributed to better operating business and the decision not to write off €268 million worth of Yeezy inventory.
Adidas, a long-time supplier of shirts for Argentina's national football team, faced additional financial strain due to the devaluation of the Argentine Peso at the end of 2023.
The country's President, Javier Milei, implemented a drastic 50% devaluation as part of what he termed "economic shock therapy." Rival sportswear firm Puma also reported negative impacts on its financial results, highlighting the broader repercussions of Argentina's currency devaluation on the sportswear industry in the region.
