Adidas’s road to recovery post-Yeezy is challenging but plausible

After much consideration, Adidas CEO Bjørn Gulden announced last week the retailer will sell some of the unsold stock from its partnership with Yeezy (a fashion collaboration with Ye, formerly known as Kanye West) and donate the proceeds, adding that “burning the goods would not be a solution.”

The announcement came after much speculation about what would happen to the $1.3 billion worth of unsold shoes and apparel that remained as a result of Adidas’s falling out with Yeezy in 2022 in light of Ye’s antisemitic remarks.

The German sneaker retailer netted a loss of $540 million in the final quarter of 2022 due to the failure of its partnership with Ye, but Gulden seems optimistic about finding a solution, though it could be tricky.

For instance, even if Adidas is able to sell some of its Yeezy stock, it is likely that Ye would be entitled to commissions, Reuters reported.

Playing ball: Gulden, a former pro soccer player, joined Adidas in January with a plan to focus on American sports, such as basketball and soccer, in an effort to boost business. Sales of the brand’s sportswear and equipment rose last year, while its fashion sales declined.

Adidas has since moved its basketball product team into a new facility in Los Angeles and also plans on new partnerships with athletes and with Major League Soccer.

Beyond sports, the brand is forging partnerships with the aim of attracting younger consumers (Gen Z, of course), such as its collaboration with Wednesday star Jenna Ortega in February.

“Another way for [Adidas] to think about partnerships is, ‘How are we going to tap into the unexpected, the random?’” Hannah Hickman, partner and head of the youth culture practice at consulting firm Sparks & Honey, told Marketing Brew. “I think we’re in an era of celeb brand matchups that is yielding a lot of excitement from Gen Z.”—JS