Keeping it Real with Yeezys
Adidas Plans. So, here’s the scoop – Adidas dropped the news on Wednesday that they’re not ditching the bulk of their unsold Yeezy kicks. Instead, they’re planning to sell the leftover shoes, at least at the cost they snagged them for. Why? Well, the sportswear giant wants to bounce back from some losses.
Initially, Adidas was thinking of waving goodbye to around 300 million euros (that’s about $325 million) worth of unsold Yeezy stock. Why? Because they cut ties with Ye, the artist formerly known as Kanye West, due to some not-so-great remarks he made. But, hold up, things have taken a turn.
Unexpected Profits and Sneaker Plans
Surprise, surprise! Adidas didn’t just weather the storm; they actually made an operating profit of 268 million euros in 2023. That’s pretty impressive, especially considering they were initially expecting a loss of 100 million euros. How’d they do it? Well, they chalk it up to their unexpectedly good business during the fourth quarter and a smart move regarding the remaining Yeezy inventory.
In their announcement, Adidas spilled the tea – they’re not ditching most of the Yeezys. Instead, they’ll only be writing off a small chunk in the low double-digit millions. The big plan? Sell the rest at least at the cost price throughout 2024.
CEO Talks Strategy
Adidas CEO Bjørn Gulden shared the game plan, saying, “Our consumer, retail, and trade research has shown that we can sell this remaining inventory in 2024 for at least the cost price.” Translation: They’ve done their homework and reckon people will be snapping up those Yeezys.
But wait, there’s more. Gulden clarified that they’ve only written off the Yeezy inventory that’s damaged or seriously messed up in certain sizes. So, the rest is fair game for selling.
Last Year’s Yeezy Cash Splash
Let’s throw it back to last year – Adidas raked in about 750 million euros from Yeezy sales. Big money, right? Well, they didn’t just hoard it. Some of those profits went to good causes, like the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, which is run by George Floyd’s brother.
But, here’s the kicker – Adidas isn’t clear on whether they’ll be playing the donation card with the leftover Yeezy sales. In their official word, they stated there’s “no assumed profit contribution from Yeezy” in fiscal 2024. Translation: They’re staying mum on whether more donations are in the cards for this year.
So, there you have it – Adidas making moves, not writing off Yeezys, and keeping the sneaker game interesting. What’s next for the Yeezy empire? We’ll just have to keep our eyes on those kicks. Stay tuned!