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Adidas AG recently cancelled its business partnership with Kanye West following his controversial antisemitic remarks on social media. With the breakup, the German sneakers and sportswear manufacturer is devising a plan on what to do with its Yeezy products since it is a collaborative brand with the American rapper and businessman.
Adidas dropped West last month, and the latter did not see this coming since he was confident the company will not sever its ties with him. However, the firm finalized its decision to end its relationship with West after reviewing its business.
As per Fox Business, with how things turned out, Adidas said during its quarterly earnings call on Wednesday, Nov. 9, that it is still planning to sell its Yeezy shoes and apparel line. While these products feature West’s designs, they will be sold under a new branding, and customers may see them in stores as early as next year.
Harm Ohlmeyer, Adidas’ chief financial officer, who is also currently serving as its interim CEO until Dec. 31, explained that this plan is possible as the company remains the sole owner of all the design rights registered to all of its existing products. This simply means that the brand has all the rights to keep manufacturing Yeezys and other Kanye West-inspired items.
Moreover, Adidas mentioned it has the sole rights not just to the existing Yeezy but to the future products that will be made under this line of designs. This includes the use of colors and the production of new versions of the designs.
This marketing of Yeezys under Adidas’ own branding is actually beneficial since it will save the company some $300 million. Typically, this is the amount spent on marketing and royalty payments for the collaborative items, CNN Business reported.
“Going forward, we will leverage the existing inventory with the exact plans being developed as we speak,” Ohlmeyer said on Wednesday.
Meanwhile, Adidas’ Yeezy line was one of the company’s best-selling products thus its fallout with Kanye West has also hurt the brand. It was reported that the termination of their contract cost the sneaker manufacturer more than $250 million in profit and $500 million in lost revenue. Morgan Stanley said the Yeezy items generated almost $2 billion in sales in 2021, and this accounted for eight percent of Adidas' total sales.
Photo by: Kyle Brinker/Unsplash
