Adidas’ decision to cut ties with Kanye West proved to be a risky one because the company still has more than $500 million worth of the artist’s shoes to sell even without his name on them.
We previously knew Adidas intended to continue selling unbranded Yeezys after the split, but now we know a little bit more about why. The Financial Times reports that insiders within the shoe business assert Adidas is sitting on a massive mountain of Yeezys.
According to the source, the company’s inventory is estimated to be worth $530 million. Adidas is reportedly keen to sell these items to avoid suffering a worse blow than what has already been publicly announced, which was already looking bleak for end-of-year numbers.
The FT story goes into some into about how closely related it was to Yeezys and how much Adidas was depending on it, in addition to the staggering number of shoes it has to sell (which Adidas is allegedly scrambling to figure out how to do).
Adidas made upwards of $1.8 billion from Yeezys in 2022 alone, accounting for about 7% of its overall earnings. According to the article, Yeezy has continued to be a reliable product in Adidas’ wheelhouse at least till 2019. This may help to explain why Adidas waited so long to end its relationship with Kanye because the rapper (and his shoe brand) was essentially its cash cow.