Adidas reported losing $540 million in Quarter 4 of 2022, the first loss for the company in 31 years.
This drop in revenue comes as a result of the company’s decision to break partnership with Ye in October. They broke from the artist, formerly known as Kanye West, in response to his anti Semitic and anti-Black comments made on social media.
The Yeezy line accounted for an estimated 15% of Adidas’s net income. The financial strain of the loss of these products has led to a reported new deal between the artist and the sportswear manufacturer. On February 24 Hypebeast reported that Ye and Adidas had reached a new deal to sell $500 million of the remaining Yeezy sneakers.
Some USC students feel that the move is problematic.
Zaira Blake: I saw it as like a real brave act for Adidas to cut ties with them. Considering that Kanye has contributed so much revenue to Adidas. But then now that they’re coming back, another that they lost so much money and now they’re coming back, I realize that it really was all just performative. So it really makes me kind of look down and Adidas.
Other students feel that the new partnership is troubling but it won’t affect their decision to buy Adidas or Yeezy products.
Shari Hill: I think it just goes to show that these companies really promote, you know, being inclusive and just caring about their customers. But in actuality, everyone is just out for money. And I’m not here to say like, oh, don’t buy from them, because maybe if I like a new Yeezy, I might buy it. Like, I’m not going to lie. But at the same time, it’s just about, you know, just try to find brands that actually do care about their customers and aren’t only worried about, you know, what they can produce for themselves.
Despite the debate, Jeffrey Hirsch, Professor of branding and integrated marketing thinks that the smartest move for Adidas is right in front of them.
Hirsch: I think the best case scenario for them as they liquidate the inventory, they give the profits to charity, preferably some, you know, education, anti-Semitism, education in Germany.
After this dilemma, Hirsch sees no future for the shoe line.
Hirsch: Yeezy is over. I mean, you know, there’s no going back to that. You know, the damage is done and Kanye is toxic and, you know, they can’t possibly go on with that. And it can’t be Yeezy without Ye...
Regardless of the situation that they’re in, Adidas seems like its in between a rock and a hard place.
For Annenberg Media, I’m Haylee Clophus.