German multinational sportswear company Adidas has found itself in a difficult position more than two months after cutting ties with Kanye West, who is now formerly known as Ye. The sportswear giant is now stuck with Yeezy sneakers worth over €500 million ($530 million) a result of its dissolved partnership with Ye’s Yeezy brand.
The Yeezy brand accounted for about $1.8 billion of Adidas’ total sales this year, but the breakup is expected to cost the company up to $247 million in earnings. In an effort to minimize potential losses, Adidas is now trying to sell the remaining Yeezy sneakers under its own brand.
The split between Adidas and Ye came after the African-American mogul made antisemitic comments, violating the company’s values of diversity, inclusion, mutual respect, and equality. Since the breakup, Ye’s net worth has declined by $1.6 billion, falling from $2 billion to $400.1 million.
The recent breakup with Adidas has left Ye without a partnership in the retail industry to fall back on, and his current net worth of $400 million is largely made up of real estate, cash, a music catalog, and a five-percent stake in his ex-wife Kim Kardashian’s shapewear company, Skims.
In September, Ye also terminated his deal with Gap, claiming that the retailer failed to meet its obligations under the agreement, which included distributing Yeezy products in its stores and opening dedicated Yeezy Gap stores by the second half of 2021.
In an effort to continue building his apparel brand, the African-American multi-industry creative recently announced plans to sell a variety of hoodies in collaboration with Balenciaga, Adidas, and Gap for $20.
The current situation is challenging for both Ye and Adidas. While Ye tries to move forward with his brand, Adidas must find a way to sell the remaining Yeezy sneakers and minimize potential losses from the dissolved partnership. It remains to be seen how the situation will play out, but it is clear that both entities will face challenges in the coming months.
