Adidas Narrows Losses Thanks to Leftover Yeezy Inventory — Retail Bum

Adidas has revised its guidance for 2023 as the initial sale of its leftover Yeezy inventory is expected to narrow its operating loss to $499 million from its previous estimate of $775 million.

The company revealed that it has received $565 million worth of orders from releasing four million pairs of Yeezy shoes. Its projections could further improve based on future sales of the remaining inventory, even though it plans to donate a significant share of its sales to organizations that work to end hate speech and discrimination.

The news comes two months after the German sportswear giant began selling the remaining Yeezy shoes leftover from its defunct partnership with rapper Ye, formerly Kanye West.

In September 2022, when adidas terminated its partnership with Ye following his antisemitic remarks on Twitter, the company was left with nearly $1.32 billion worth of sneaker inventory.

The end of the lucrative partnership with Ye came at a hefty cost of $540 million for adidas, causing the company to cut its projected annual earnings forecast in half for 2022. Since then, CEO Bjorn Gulden, who was hired in January 2023, has been focussing on growing the company’s business in China and scaling the production of its classic Samba sneakers to meet the high demand.

In addition, the company has looked to expand partnerships, including one with South African designer Thebe Magugu to design uniforms for football club Orland Pirates and with brands such as Fear of God.

Originally published at https://retailbum.com on July 26, 2023.