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Trainer aficionados have snapped up the first batch of Yeezy shoes sold by sportswear giant Adidas since the end of its ill-fated partnership with Kanye West, cutting the risk that the group will have to take a big writedown on its remaining stock.
Adidas stopped selling Yeezy sneakers in October after terminating its lucrative agreement with West — now known as Ye — after the fashion designer and rapper made antisemitic remarks. In May, the German company said it would sell some of its inventory because destroying it would result in an extra €500mn loss.
But on Monday evening, Adidas disclosed that the first sale of Yeezy was so successful that it had reduced the book value of its remaining stock by one-fifth. The company also raised its full-year guidance, saying that the expected drop in overall sales as well as the operating loss will be smaller than expected.
Demand during the first online Yeezy shoes sale, which took place between the end of May and early June, exceeded the company’s most optimistic forecast, people with knowledge of the details said before the company revised its outlook.
By June 2, Adidas had received orders worth more than €508mn for 4mn pairs of trainers, the people added. The demand was such that Adidas was unable to meet all the orders, particularly for certain sizes and models.
Customers were required to register online in advance to submit their orders. While the value of the orders received was more than €508mn, the net sales were lower, the people noted.
On Monday shares in Adidas rose 1.2 per cent while the wider German stock market remained unchanged.
The successful sale has dispelled concerns at Adidas’s headquarters in Herzogenaurach that Ye’s antisemitic outbursts and the lack of marketing for the shoes in the past six months would have severely damaged the Yeezy brand.
After joining forces in 2015, Ye became an important partner for Adidas. By 2022, his brand generated €1.7bn in sales and close to €700mn in operating profit.
The world’s second-largest sports brand on Monday said it now expected sales to shrink by about 4 to 6 per cent this year, compared to up to 9 per cent previously. The company is now bracing for an operating loss of €450mn, from a previous expectation of a €700mn loss.
However, Adidas is still on track to record the first operating loss in 31 years when it releases quarterly results on August 3.
In its first online sale, the company offered 15 different Yeezy models, including a large number of cheaper sliders as well as a few pricey models, according to people familiar with the initiative. The popular 500 Utility Black, which fetch an average of €268 a pair on online reseller platform StockX.com, sold in Europe within hours, they added.
Adidas has said it will donate a significant portion of the proceeds to charities that combat racism and antisemitism. Discussions over how much the company will donate to individual charities are ongoing, the people said.
In a first step, five charities in the US and China, including the Anti Defamation League and the Philonise and Keeta Floyd Institute for Social Change, have been chosen. Making donations of more than €8.5mn across the five charities has been discussed but no decision has been made, the people said.
However, the final amount donated from the inventory sales will be far bigger as Adidas is prepared to pay out a “significant share” of the profit from the Yeezy inventory, the people said. Adidas declined to comment on donations.
Adidas also plans to use proceeds from the inventory sale to pay royalties to Ye and meet costs stemming from the ending of the partnership, including laying off staff, closure of production capacity and legal costs. Chief executive Björn Gulden said in March that Adidas would “probably not make profit” on its remaining Yeezy inventory.
