Ending partnership with Kanye West is costing Adidas heavily as the brand deals with millions of unsold Yeezy products

What Can Adidas Do About the Billions of Yeezys Pilling Up in China?

Following the anti-semitic remarks, several brands cut ties with Kanye West
[https://netflixjunkie.com/tag/kanye-west/], including the German brand Adidas.
Although Adidas took the decision in response to Ye’s hate speech, it is Adidas
that is facing the consequence of ending the partnership. Its revenue has taken
quite a hit since the end of the deal.

The brand reportedly faces a dip in its China market and $6 billion overstocking
issues, most of which are supposedly unsold Yeezy stock!

Adidas is facing a mountain of unsold inventory. Since the brand took the Yeezy
products off the shelves after the termination, a lot of Yeezy products continue
to occupy the inventory shelves. The brand ordered more production in response
to the supply-chain turmoil that was plaguing the industry at large. However,
the brand’s current CEO, Bjorn Gulden, plans to order 800 million items instead
of 1 million this year. Additionally, he is also considering donating the
products to a good cause.



Secondly, the chief executive is also looking to recapture the China market,
which was once a key market for the brand. Adidas lost a share of China’s market
since it boycotted the country in 2021 over cotton manufacturing in Xinjiang. To
make matters worse, Covid-19 further crippled the market. Gulden’s new strategy
involves emulating local brands and having a flexible business model.

According to the Wall Street Journal,
[https://www.wsj.com/articles/adidas-slashes-dividend-as-problems-mount-df48481c?mod=e2fb&mod=e2tw]
Kanye West was responsible for 8% of the brand’s revenue. Following Ye’s exit,
the company’s net profit decreased by 83%. Growth stagnated in the fourth
quarter and the company reported a loss of €482 million. Its shares are also
trading low at about 2.4%. The final blow came when the dividend was slashed by
80%. Is the company planning to bring back Ye to gain back the numbers it lost?

ALSO READ: Fans Show Support for an Old Video of Kanye West After a TikTok of
North West Dressed as Ice Spice Goes Viral
[https://netflixjunkie.com/netflix-news-fans-show-support-for-an-old-video-of-kanye-west-after-a-tiktok-of-north-west-dressed-as-ice-spice-goes-viral/]


KANYE WEST IS PAST, ADIDAS PLANS TO PURSUE PARTNERSHIP DEALS WITH OTHER CELEBS?

Despite the alarming losses, the company is unwilling to open the doors to
welcome Ye back. Although the partnership was unique and beneficial for both
parties, Gulden thinks Adidas needs a new face. According to him, the brand can
collaborate with icons like Beyonce or even Pharrell Williams. 

The partnership deal also cost Ye his billionaire tag. But he is certainly doing
well since he continues to have a worth of $400 million
[https://netflixjunkie.com/netflix-news-despite-losing-out-on-million-dollar-partnerships-kanye-west-still-retains-the-millionaire-tag-how-is-he-still-worth-400/].

Do you think Adidas can bounce back from this steep decline without Kanye?

 

Srabani Biswas

Comment

What Can Adidas Do About the Billions of Yeezys Pilling Up in China? - Netflix Junkie

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Srabani Biswas is a writer at Netflix Junkie. She is a sociology graduate from Lady Brabourne College. Previously, she has contributed to Sports India Show and The Sports Room as a sports writer, and interned at Ripples Learning. A daydreamer, a dancer, and a lover of dogs, she enjoys quiet evenings with her laptop and a cozy blanket. With so much to do and so little time, she is constantly worried about her growing pile of unread books and unwatched shows on Netflix. Her favourites include Stranger, Vincenzo, Hello! My twenties,  Emily in Paris, Never Have I Ever, Peaky Blinders, Stranger Things, Reply 1997 and Sex Education.

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What Can Adidas Do About the Billions of Yeezys Pilling Up in China? - netflix-junkie

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Following the anti-semitic remarks, several brands cut ties with <a href="https://netflixjunkie.com/tag/kanye-west/">Kanye West</a>, including the German brand Adidas. Although Adidas took the decision in response to Ye&#8217;s hate speech, it is Adidas that is facing the consequence of ending the partnership. Its revenue has taken quite a hit since the end of the deal.
The brand reportedly faces a dip in its China market and $6 billion overstocking issues, most of which are supposedly unsold Yeezy stock!
Adidas is facing a mountain of unsold inventory. Since the brand took the Yeezy products off the shelves after the termination, a lot of Yeezy products continue to occupy the inventory shelves. The brand ordered more production in response to the supply-chain turmoil that was plaguing the industry at large. However, the brand&#8217;s current CEO, Bjorn Gulden, plans to order 800 million items instead of 1 million this year. Additionally, he is also considering donating the products to a good cause.
<div class="flex-video widescreen youtube"><iframe loading="lazy" title="Adidas Ends Deal With Kanye West Over Hate Speech, Rapper Loses Billionaire Status" width="1170" height="658" src="https://www.youtube.com/embed/XxTJaYgjuHU?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe></div>
Secondly, the chief executive is also looking to recapture the China market, which was once a key market for the brand. Adidas lost a share of China&#8217;s market since it boycotted the country in 2021 over cotton manufacturing in Xinjiang. To make matters worse, Covid-19 further crippled the market. Gulden&#8217;s new strategy involves emulating local brands and having a flexible business model.
<a href="https://www.wsj.com/articles/adidas-slashes-dividend-as-problems-mount-df48481c?mod=e2fb&amp;mod=e2tw">According to the Wall Street Journal,</a> Kanye West was responsible for 8% of the brand&#8217;s revenue. Following Ye&#8217;s exit, the company&#8217;s net profit decreased by 83%. Growth stagnated in the fourth quarter and the company reported a loss of €482 million. Its shares are also trading low at about 2.4%. The final blow came when the dividend was slashed by 80%. Is the company planning to bring back Ye to gain back the numbers it lost?
ALSO READ: <a href="https://netflixjunkie.com/netflix-news-fans-show-support-for-an-old-video-of-kanye-west-after-a-tiktok-of-north-west-dressed-as-ice-spice-goes-viral/" target="_blank" rel="noopener">Fans Show Support for an Old Video of Kanye West After a TikTok of North West Dressed as Ice Spice Goes Viral</a>
<h2>Kanye West is past, Adidas plans to pursue partnership deals with other celebs?</h2>
Despite the alarming losses, the company is unwilling to open the doors to welcome Ye back. Although the partnership was unique and beneficial for both parties, Gulden thinks Adidas needs a new face. According to him, the brand can collaborate with icons like Beyonce or even Pharrell Williams. 
The partnership deal also cost Ye his billionaire tag. <a href="https://netflixjunkie.com/netflix-news-despite-losing-out-on-million-dollar-partnerships-kanye-west-still-retains-the-millionaire-tag-how-is-he-still-worth-400/">But he is certainly doing well since he continues to have a worth of $400 million</a>.
Do you think Adidas can bounce back from this steep decline without Kanye?
&nbsp;

Fans Show Support for an Old Video of Kanye West After a TikTok of North West
Dressed as Ice Spice Goes Viral

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Srabani Biswas is a writer at Netflix Junkie. She is a sociology graduate from Lady Brabourne College. Previously, she has contributed to Sports India Show and The Sports Room as a sports writer, and interned at Ripples Learning. A daydreamer, a dancer, and a lover of dogs, she enjoys quiet evenings with her laptop and a cozy blanket. With so much to do and so little time, she is constantly worried about her growing pile of unread books and unwatched shows on Netflix. Her favourites include Stranger, Vincenzo, Hello! My twenties, Emily in Paris, Never Have I Ever, Peaky Blinders, Stranger Things, Reply 1997 and Sex Education.

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What Can Adidas Do About the Billions of Yeezys Pilling Up in China?

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