Adidas has just recently experienced a 40% decrease in profit after ending its multimillion dollars partnership with Yeezy. Yeezy is a sportswear brand owned by Kanye West, but due to the controversy about Kanye’s opinion about ‘anti-Semitism’, Adidas ended the contract. The brand said it “does not tolerate antisemitism and any other sort of hate speech” as it violates the company’s “values of diversity and inclusion, mutual respect and fairness.” 7 months down the line, the company experienced a financial collapse as it lost footing in target markets.
Around $1.3 billion worth of Yeezy’s inventory is sitting in the storehouse unsold according to Bloomberg, Adidas has now decided to sell Yeezy’s merchandise, and a portion of the sale profits to is set to be given to charity. In as much as the brand is struggling to stabilize its finances, it’s been forecasted that Adidas will be losing over $700 million this year.
Janne Werning, head of ESG capital markets and stewardship at German shareholder Union Investment said in a statement; “Adidas needs a complete overhaul after the Yeezy disaster,” he continued; “After these lost years, Adidas CEO Bjørn Gulden has a lot of work ahead of him.”
According to sources, for Adidas to be able to move forward from this disaster, the solution will be ‘Huge discounts and rebranding’. Giving part of the profit to charity will probably reduce the impact on public perception of the brand’s diversity and inclusion ethos.
