FRANKFURT, Germany – Adidas has achieved a revenue of 400 million euros ($437 million) from the initial release of Yeezy sneakers that were left unsold after the company ended its partnership with rapper Kanye West, also known as Ye. The German sportswear manufacturer has now pledged to donate a portion of the proceeds to organizations dedicated to fighting antisemitism and other forms of hatred.
The sale of the first batch of Yeezy shoes, which took place in June, played a significant role in Adidas exceeding its operating profit target and reaching 176 million euros in the second quarter. Adidas announced on Thursday that this performance exceeded their initial expectations.
Following Ye’s controversial and antisemitic comments, Adidas looked for a responsible way to handle the surplus inventory of high-end Yeezy shoes, valued at 1.2 billion euros. CEO Bjørn Gulden, who took office in January, stated that they plan to gradually sell off the remaining Yeezy inventory. The company confirmed the sell-out of the first batch of Yeezy shoes and recently launched a second release.
Instead of disposing of or writing off the unsold inventory, Adidas decided to support charitable causes with the proceeds. The company intends to make significant donations to organizations such as the Anti-Defamation League, the Philonise & Keeta Floyd Institute for Social Change, and Robert Kraft’s Foundation to Combat Antisemitism.
Although some Jewish community leaders mentioned that they do not plan to purchase Yeezys themselves, they appreciated Adidas’ efforts to support anti-hate organizations and recognized the company’s attempts to turn a challenging situation into a positive one.
The CEO of Adidas emphasized that the Yeezy sales have a dual impact, benefiting both their cash flow and overall financial strength.
Ending the partnership with Ye put Adidas in a difficult position, given the immense popularity of the Yeezy line. As other companies cut ties with the rapper, Adidas faced increasing pressure to do the same, resulting in significant financial losses. However, the company now expects a smaller operating loss of 450 million euros this year, down from the originally projected 700 million euros.
According to Adidas, the revenue from Yeezys in June was comparable to the sales seen during the same period in the previous year.
As for the details of the agreement with Ye and whether he receives royalties from Yeezy sales, Adidas has chosen not to disclose further information, stating only that they will honor their contractual obligations and enforce their rights.