Investors in the German sportswear giant Adidas were left counting losses on Monday, as the company’s market capitalization took a significant hit of $364 million following the announcement of the second sale of Kanye West’s Yeezy sneakers.
At the time of writing, Adidas shares on the “Deutsche Börse” stock exchange in Frankfurt were valued at €179.42 ($197.33), marking a 102 basis point drop from their opening price of €181.26 ($199.36) earlier that morning.
The share decline adversely affected the company’s shareholders, including Egyptian billionaire Nassef Sawiris, who owns a substantial seven-percent stake in Adidas.
As a result of the dip, Adidas suffered a €331.2 million ($364.27 million) blow to its market capitalization, with the company’s valuation falling from €32.62 billion ($35.88 billion) at market open that morning to €32.29 billion ($35.52 billion) at the time of reporting.
The recent downturn came shortly after the German sportswear giant announced the launch of the second sale of Kanye West’s Yeezy sneakers.
The initial release of the collaboration proved to be a resounding success, with Adidas reporting a staggering €400 million ($440.7 million) in sales between April and June this year.
Adidas’ move to commence the second sale was fueled by the remarkable financial performance of West’s Yeezy sneakers during the first release.
Despite the controversies surrounding Kanye West, the line retained immense commercial appeal, driving excitement among eager fans and sneaker enthusiasts looking to acquire these iconic footwear pieces.
However, despite the impressive performance of the initial release, Adidas exercises caution regarding future sales. The company acknowledges that the first sale primarily included the highest-priced shoes, which significantly contributed to the sell-out. Consequently, it remains uncertain whether subsequent releases will see similar price levels and demand.
Investors are now closely watching Adidas’ Yeezy sneaker sales developments as the sportswear giant navigates the delicate balance between maintaining its popularity and profitability in the fiercely competitive sneaker market.
