Adidas officials have made a prediction about their unsold stock for the particular brand that could cost them over a billion dollars.
There is great unrest among the investors just as the company made the announcement about the unsold stock.
Unsold Yeezy Stock
The officials at Adidas have revealed that they have unsold stock for Yeezy. Although an ample amount of time has passed, the stock for the Yeezy brand is still unsold.
This is going to cost them tremendously as they will suffer from severe losses for not being able to sell the unsold stock.
The share prices for Adidas recorded a major dip after they made the announcement about the pending stock.
The company has revealed that the value of the unsold stock they have on them is worth $1.3 billion, which translates to 1.2 billion euros.
As the stock is still unsold, it is going to reflect in their earnings for the respective quarter. They will face a major loss in quarterly earnings due to the stock.
Adidas Sacked Ye
Yeezy is the brand that was launched by Ye, who was previously known as Kanye West. The brand caught the attention of Adidas and soon, the German sportswear company acquired the Yeezy brand.
However, part of the deal was that Ye would be the face of the Yeezy brand. Over the course of years, Ye was able to point the brand in the right direction and it became one of the most valuable brands backed by Adidas.
This helped Ye become a billionaire in the process but as the turn of events took place, Ye was sacked by Adidas.
Ye has always been in the headlines and the trends for his straightforward and bold statements. He has remained one of the most controversial celebrities who initially earned his name as a pop artist and a rapper.
Although Ye was known for making several controversial statements, he was always able to get away with them.
However, things did not work out for Ye as the rapper and the co-owner of the Yeezy brand ended up anti-Semitic comments. He made such comments in a series and they caught the attention of the entire world.
It triggered the entire social media sector and Ye was heavily criticized for his comments. Looking at the heat the rapper was gathering and the harm he could cause to the brand, Adidas decided to take the difficult step.
Right after Ye made the comments, Adidas took the matter into its own hands and in a matter of a few days, they made an announcement.
They confirmed that they had scrapped the partnership they had formed with the rapper. They revealed that they had cut all ties with the fashion designer and he would no longer be representing their brand.
They even stopped the sales for the Yeezy brand that was co-owned by Ye in the first place.
Impact on the Business
Adidas issued a statement about the decision they made against Ye. They confirmed that the comments that the fashion designers made were not supported or endorsed by Adidas at all.
Therefore, they ended their partnership with Ye and sacked the entire brand. As for the accessory that is left, Adidas has announced that they have no intentions of selling the products to their customers.
They also confirmed that they did all the homework before coming to the conclusion of canceling their partnership with Yeez.
They knew that they would suffer from major losses if they did not carry out the sales for the particular brand. They have already accounted for the losses and have decided not to sell the shoes at all.
Adidas is speculating that their operating profit would go down by €500 million as they do not sell the particular brand.
Following the announcement, the share prices for Adidas sank by 9.5%.
