(Frankfurt) German sports equipment manufacturer Adidas is not considering launching a new pair of shoes based on its former lucrative Yeezy model, linked to the rapper Ye with whom it has stopped its cooperation, its boss assured Wednesday.
“We have no intention of trying to replace Yeezy with anything else because I don’t think it’s possible,” Bjorn Gulden, chairman and CEO, said in a conference call.
In October 2022, Adidas ended its collaboration with the controversial rapper, now known as Ye, who had made anti-Semitic remarks.
The collaboration between Adidas and the American star has long been one of the most successful in the fashion world.
The brand with the three stripes remained with an unsold stock of 1.2 billion euros on its hands, deciding to sell it in batches to donate part of the profits to associations fighting against racism and anti-Semitism, rather than destroying it.
The two sales organized in the second and third quarters brought in around 750 million euros.
There will be no new sales this year, as Adidas wants to assess the market in the coming months before deciding, Mr. Gulden added.
At the end of September, there remained a stock valued at 300 million euros, at the production cost, concerning these famous shoes.
Adidas also confirmed its third quarter results and annual forecast on Wednesday, as communicated at the end of October.
Overall sales excluding Yeezy increased 2% and inventory levels fell faster than expected, by 23% year-on-year to €4.85 billion, including Yeezy shoes.
“We are satisfied with the current stock situation, except in North America” where it will take “a few more months to reach the right level,” said Mr. Gulden.
Adidas confirmed that it expects an operating profit excluding exceptional effects of “100 million euros” and a loss of 100 million including in particular the depreciation on Yeezy stock, much better than initially forecast in February.
This data confirms progress towards the “main objective of emerging from 2023 in a much stronger position to accelerate its growth in 2024”, according to analysts at Deutsche Bank.
“We are confident that with the brand value and scale we have, we can also achieve a 10% Ebit (operating profit) margin without Yeezy” by 2025 -2026, added Mr. Gulden.
On the Frankfurt Stock Exchange, Adidas shares fell 1.5% at midday.