What's Going to Happen to Yeezys After the Adidas-Ye Fallout?
Last October, Adidas made the executive decision to cut ties with Kanye West (but we're going to be using his legal name more here) after a flurry of anti-semitic comments and the subsequent public blowback. But the company isn't looking to stop selling Yeezy products anytime soon. As a matter of fact, it is most likely going to release new Yeezys under its own branding by next year.
"Adidas is the sole owner of all design rights registered to existing product," Adidas CFO Harm Ohlmeyer explained on a Wednesday briefing on the brand's quarterly earnings. "We intend to make use of these rights as early as 2023."
Fortunately for Adidas, it still owns the rights to all the versions and new colorways of the Yeezys, except for the slides, which Ye owns the patent to.
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Ye's partnership with Adidas began in 2013 and has been pretty successful. He had even received royalties from the line, which he once criticized Nike for. While the collaboration has yielded favorable results from a sales standpoint, it wasn't necessarily the smoothest one. Ye has publicly chided Adidas a bunch of times in the past even before the artist's horrendously upsetting blab-a-thon the past weeks. We may recall incidents such as the Adidas-made "fake Yeezys" last June and the "unofficial official" Yeezy Day campaign without Ye's approval.
Reports of weird workplace practices have also emerged, where former employees described the environment at Yeezy as "cult-like," "abusive," and "chaotic." Staffers were said to have worked 15-hour work days and had constantly worried about getting fired by Ye. An anonymous source also told Rolling Stone that West once casually remarked that “skinheads and Nazis were his greatest inspiration.”
This comes during a less-than-ideal time for Adidas, as its stock has been trending in the wrong direction during the past two years, falling by as much as 80 percent. Reports say that Adidas stands to lose more than $250 million in profit and $500 million in lost revenue after the Ye fallout. One of the few good things to come out of the split, however, is that Adidas should save approximately $302 million in 2023. This is because it no longer will be carrying royalty fees and marketing costs from the Yeezy product line.
As for the existing merchandise, Adidas has yet to reveal its plans for them. It could easily pull out the Ye-led stock from stores. Hell, the company could just burn them. The brand nevertheless claimed that it is "reviewing" all its options at this point. Adidas also recently hired Puma Head Bjorn Gulden as its new chief executive officer (yes, they're still rivals, in case you were wondering). The move signals what should be a new era for the brand as it tries to recover from its losses.
