Adidas donates to anti-hate groups on strength of Yeezy trainer sales
13 March 2024, 12:24
The firm broke off its partnership with Ye in October 2022 over his antisemitic and other offensive comments on social media.
Adidas said it has donated or is planning to give away more than 150 million dollars (£117 million) to groups fighting antisemitism and other forms of hate from the sales of Yeezy trainers last year after it severed ties with Ye, the rapper formerly known as Kanye West.
The German sportswear brand had 1.2 billion euro (£1.01 billion) worth of popular Yeezy trainers piled up in warehouses after it broke off its partnership with Ye in October 2022 over his antisemitic and other offensive comments on social media and in interviews.
Adidas decided to sell some of the remaining shoes in batches, with two releases last year and another late last month, and to donate a portion of the proceeds to anti-hate groups.
The company has made donations to the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, run by social justice advocate Philonise Floyd, the brother of George Floyd.
Net sales of what remains of Adidas’ former banner line of shoes brought in about 750 million euro (£640 million) last year, compared with more than 1.2 billion euro (£1.02 billion) in 2022, the company reported.
Of the 300 million euro (£256 million) profit it earned from the sales of Yeezy shoes last year, the company said it had given away or planned to donate more than 140 million euro (about £119 million).
Adidas said deciding to sell a big chunk of its Yeezy inventory and improved operations helped it pull out operating profit of 268 million euro (£229 million) last year, a near-60% plunge from the previous year.
It blamed a high tax rate for ending the year with a net loss of 58 million euro (£49.5 million), a massive turnaround from net income of 254 million euro (£219 million) in 2022.
Chief executive Bjorn Gulden, who took over the top job last year, said: “Although by far not good enough, 2023 ended better than what I had expected at the beginning of the year.”
Looking forward, Adidas expects to make about 250 million euro (£213 million) in sales of the remaining Yeezy shoes this year.
But the company, based in Herzogenaurach, Germany, points to North America as a persistent problem spot, and expects revenue there to decline in the mid-single digits this year and grow everywhere else.
It said that North America was “particularly affected by the negative Yeezy impact” and that revenue there dropped 16% last year.
Adidas expects to almost double operating profit to about 500 million euro (£427 million) this year despite “macroeconomic challenges and geopolitical tensions”.
It plans to further scale up popular shoe lines like Samba that are seeing “extraordinary demand”, launch new ones and obtain a boost from major sports events like the Paris Olympics this summer.
Adidas shares were up slightly in late morning trading.
