Dive Brief:
- Adidas on Friday confirmed it would release more Yeezy inventory in August, and will continue to donate “a significant amount” of the proceeds to organizations combating hate, according to a press release.
- This time around, certain Adidas wholesale partners will also be a part of the release, but only through their digital platforms. The products, which were all initiated in 2022, will also be sold on Adidas’ website and mobile app.
- The second drop of Yeezy inventory will start on Wednesday and will use a phased release to manage demand and ensure “a fair and premium experience” for shoppers.
Dive Insight:
While Adidas has been vocal about the financial impact of ending its collaboration with Ye, also known as Kanye West, the retailer seems to be recouping a great deal of its expected losses.
Adidas in March projected its first annual loss in three decades, in large part due to the potential write-off of Yeezy merchandise. At the time, the retailer was considering several methods of dealing with the inventory, including burning or donating it. Instead, the company settled on selling it and donating a chunk of the proceeds to charity.
The first leftover Yeezy drop was in May, and it sold well despite the controversy surrounding the partnership. Adidas gave a hint of just how well it sold a few days ago when the retailer raised its annual guidance thanks to the impact of the first Yeezy sale. With the altered guidance, the retailer’s expected operating loss shrunk by more than 250 million euros (about $275 million at press time). The retailer is still left with 400 million euros worth of leftover Yeezy inventory.
Adidas was already suggesting there could be more drops of Yeezy inventory in the future, which would further improve its results. In the second release, which is now only days away, Adidas plans to sell designs including the Yeezy Slide, Foam Rnr and the Yeezy Boost 350 V2, 500 and 700.
The retailer will work with organizations including the Anti-Defamation League, the Philonise & Keeta Floyd Institute for Social Change, and Robert Kraft’s Foundation to Combat Antisemitism. As part of its partnership with the Foundation to Combat Antisemitism, Adidas will include square blue pins with the sale of some of its products in North America, which is a symbol against antisemitism and hate.
While Adidas is lessening the financial impact of the end of its Yeezy deal, the retailer has a myriad of other challenges to address, including how to better compete with Nike in North America.
