Adidas has failed to find “the next big thing,” Tom Nikic, a Wedbush analyst, told The Washington Post in February

Losing the Yeezy brand is “of course hurting us,” Gulden said in a statement. The breakup will reduce earnings by 500 million euros this year if Adidas decides not to sell the remaining Yeezy stock, the Herzogenaurach-based company said. Beyoncé’s Ivy Park clothing brand partnership with Adidas has underperformed, the Wall Street Journal reported. And, so far, Adidas has failed to find “the next big thing,” Tom Nikic, a Wedbush analyst, told The Washington Post in February after the company’s announcement about its potential Yeezy losses. Adidas ended its relationship with West, who goes by the name of Ye, when the artist posted anti-Semitic tweets after showing a “White Lives Matter” T-shirt design at Paris Fashion Week in October. “When there are more than financial questions at play, the dance between figuring out donating versus liquidating, versus simply moving on, gets complicated,” said Simeon Siegel, a retail analyst at BMO Capital Markets. There appears to be demand for the product. The CEO of Impossible Kicks, a large online reseller, told CNN last week that his company has seen a 30 percent spike in Yeezy sales since Adidas and Ye parted ways last fall. Investors filed a class action lawsuit against Adidas last month, alleging executives knew about Ye’s problematic behavior for years and stalled on ending the partnership. In the personnel risk section of Adidas’ 2018 annual report, the company touted its commitment to having an equitable workplace “while failing to discuss how it routinely ignored extreme behavior from Kanye West,” according to the lawsuit, which represents people who bought Adidas stock between May 2018 and February 2023.

Ye is not named as a defendant in the case. The existing contract between the musician and the brand, which pays the former $20 million annually, is set to expire at the end of this year. Adidas executives are apparently considering rejigging or terminating it.Adidas will still sell Yeezys but under a different branding. Adidas’ collaboration with the Chicago native officially started in 2016, with the company at the time calling the clothing-and-shoe deal “the most significant partnership ever created between an athletic brand and a non-athlete.” But the relationship disintegrated last October after the rapper made antisemitic remarks on social media. The German company’s decision to cut ties came after weeks of pressure from celebrities and others. Two weeks ago, after he wore a White Lives Matter shirt, Adidas said he was under review. At this point, what more do you need to review? Greenblatt writes. During Adidas’ annual shareholder meeting Thursday, Gulden said the company spent months thinking of options on what to do with the unsold sneakers, such as talking with several nongovernmental organizations, before making a decision. Gulden would not say how many pairs of Yeezy shoes that Adidas is stuck holding “because then the consumer would know how many we have and that could have an impact on demand.” “The numbers speak for themselves. We are currently not performing the way we should,” Gulden, who started in January, said. “2023 will be a year of transition to set the base to again be a growing and profitable company.” “Going forward, we will leverage the existing inventory with the exact plans being developed as we speak,” Adidas finance chief said Wednesday Harm Ohlmeyer.

The Yeezy line was a key product for Adidas and the fallout has hurt the company. Jewish groups were among the strongest voices urging Adidas and other companies to sever ties with Ye, warning that refusing to do so could further fuel hatred against Jews at a time when antisemitism is on the rise, in Germany and the United States alike. Shelton Boyd-Griffith, a contributing style editor at Essence, recommends a hybrid donation-recycling approach. “I think it would be great to repurpose the shoes to be used by other designers, or even in-house to create other shoes,” he said. The bases, or other non-identifying materials from the shoes, could be used in existing Adidas designs. “I know it’s very Frankenstein, but it could work.” On Tuesday, Adidas announced it will be led by a new CEO starting next year. The current CEO, Kasper Rorsted, will be succeeded by Puma’s Bjørn Gulden, who is credited with turning around the company and increasing its sales. In October 2022, Adidas cut ties with Ye over his anti-semitic tirade. Since then, the future of Yeezys was partially clear. The company said it would not support any future Yeezy product drops, and it instructed retail operators to pull any existing product from shelves and digital sites. Last week, it also quietly shut down the Yeezysupply.com website, which Ye has used to launch his various adidas Yeezy collaborations, restocks, apparel items, Balenciaga team-ups, GAP products and more. It’s also ignited an ethical dilemma. How does Adidas discard the items that caused a PR nightmare without triggering another outrage over waste? It’s the first major test of leadership for the company’s new CEO, Bjørn Gulden, who is fresh off a job at Puma.