Kanye to the rescue? Months after sports apparel giant Adidas broke business ties with hip-hop mogul Kanye West, known as Ye, the brand complained of a massive drop in sales.
In February, Adidas revealed it expected to lose $1.3 billion in revenue this year because it is no longer selling West’s designer Yeezy clothing and shoes.
As Finurah previously reported, Adidas ceased its nine-year partnership with the rapper in October 2022 after the Yeezy line generated an estimated $1.8 billion in annual revenue for the company.
Adidas Is Back — Thanks to Yeezy?
Now, after deciding to start selling Ye’s Yeezy brand again until Adidas’ stock is depleted, the German apparel company has announced its latest batch of Yeezy sales generated nearly $160 million in Q3.
The third-quarter financial results revealed revenues increasing by 1 percent compared to the same period the previous year. The company’s gross margin increased by 0.2 percentage points, reaching 49.3 percent, Reuters reported.
Adidas will report its full third-quarter results on Nov. 8.
Because of the strength of Yeezy shoe sales, Adidas has experienced an incredible upswing in its revenue forecast and an encouraging reduction in its expected loss for the year 2023.
But the company isn’t giving all the credit to Yeezy.
“While the company’s performance in the quarter was again positively impacted by the sale of parts of its remaining Yeezy inventory, the underlying Adidas business also developed better than expected,” the company said in a press release.
Adidas recently announced that it now anticipates an operating loss of approximately $106 million for 2023, a significant improvement from its previous estimate of $475 million. So the company cut losses by more than $300 million .
Bringing Back Yeezy
Since the end of May, Adidas has been selling its remaining stock of Yeezy shoes. When Adidas terminated its deal with Yeezy the company had about $1.26 billion worth of sneakers left. The company toyed with writing off the stock before announcing it would sell the inventory, and give some of the profits to charity.
When Adidas ended its very profitable partnership worth $1.5 billion with West over remarks he made that were deemed anti-Semitic, the company issued a statement, saying it “does not tolerate antisemitism and any other sort of hate speech.”
This move followed Kanye’s turning to Twitter and saying he would go “death con 3 on JEWISH PEOPLE.” He doubled down on the remark during several media interviews.
In its statement, Adidas added his comments were “unacceptable, hateful, and dangerous.” Adidas said the comments violated the company’s “values of diversity and inclusion, mutual respect and fairness.”