German multinational sportswear giant Adidas has reportedly reached a new agreement with African-American rapper-turned-mogul Kanye West and his brand as part of its plan to sell off the existing Yeezy products in its inventory worth $500 million.
The move comes in the wake of the recent decision by S&P Global Ratings, a division of S&P Global, to downgrade its long- and short-term credit ratings for Adidas, citing the negative impact of West’s departure on the company’s earnings.
Adidas’ recent action to sell all remaining $500 million worth of Yeezy sneakers in 2023 follows the company’s trading update two weeks ago, in which it warned of a potential revenue loss of €1.2 billion ($1.3 billion) if it fails to sell its existing Yeezy stock after terminating its partnership with West and the Yeezy brand in October 2022.
As a result of these developments, Adidas is anticipating a high-single-digit decline in currency-neutral sales in 2023 and one-time costs of up to €200 million ($213.7 million).
According to reports, the remodeled contract between West and Adidas will focus exclusively on the sale of the existing inventory of the rapper’s popular shoe line and will not include his clothing line or new designs.
The new agreement comes after Adidas ended its 10-year partnership with Kanye West last year following anti-Semitic comments made by the rapper.
Despite attempting to find a new home for his line, West has been unsuccessful since Adidas severed ties with him due to a series of anti-Semitic comments that sparked widespread outrage in October 2022.
In November, West announced plans to collaborate with Balenciaga, Adidas, and Gap to sell a range of Yeezy brand hoodies for $20.
According to Forbes, West’s net worth has declined by $1.6 billion since the split with Adidas, from $2 billion to $400.1 million. West’s $400 million fortune is made up of real estate, cash, a music catalog, and a five-percent stake in his ex-wife Kim Kardashian’s shapewear company, Skims.
