Adidas grapples with $1.3B in unsold Yeezy sneakers after breaking up with Kanye West

The fall of Ye – the artist formerly known as Yeezus, Saint Pablo, Yeezy, Louis Vuitton Don, and Kanye West – was one of 2022's more eyebrow-raising stories. Now Adidas has been left one of the biggest losers because it is sitting on $1.3 billion worth of Yeezy sneakers made in collaboration with the rapper. In a textbook …

[ComputerSays_noAbsolutelyNo]

Doing a Musk

Behaving in a way that is bad for one self, however, which does not fall under the definition of self-harming.

Example:

"Fred, who used to be a perfectly nice guy and who I've known for years, posted a dick-pic on all our company's social media profiles. He's really doing a Musk right now."

[WolfFan]

Re: Doing a Musk

Not a Musk. A Scott Adams.

[Nightkiller]

Re: Doing a Musk

Did you listen to the Hotep Jesus interview Adams did? How about the Sunny Hostin interview? Both understand exactly Adam's point. And they agree.

Another assigned opinion.

[MrDamage]

Re: Doing a Musk

Wow, a whole of two people agreed with him.I guess that excuses him for being a racists doucheflute.

[ThomH]

Re: Doing a Musk

To be clear, Adams' most direct comment was "the best advice I would give to white people is to get the hell away from Black people. Just get the f*** away. Wherever you have to go, just get away.", i.e. he advocated in favour of segregation, treating all black people and all white people as homogenous groups.

I don't need to know who agrees or disagrees with that to have a strongly negative opinion about it.

[Orv]

Re: Doing a Musk

It only seems contradictory until you look at the underlying politics. Hotep Jesus is a black separatist and anti-Semite, so it's not exactly surprising he'd be sympathetic to Scott's pro-segregationist views.

[Dan 55]

Re: Doing a Musk

Surprisingly, two racists agree with a racist.

[WolfFan]

Re: Doing a Musk

Interesting. Who assigned me that opinion, and how did they do that without my knowledge?

And, oh, the argument from authority rarely works even if the authority in question has some bearing on the subject; I would, for example, be inclined to pay attention to something Einstein said about physics, but less inclined to pay attention to any pronouncements of his on, say, medieval history. (Except if he was talking about how siege engines worked. That would be close enough to physics. Siege engine _tactics_, now, I would suspect that I know a bit more than he did… if only because I have done quite a bit of research on that subject. Hint: there are differences between catapults, ballistas, and trebuchets, just to name one point often gotten wrong by those who don’t pay attention.) in this case, the two persons referred to have no credibility on the subject. Their opinions are without value.

Scott Adams said what he said. He has not denied it. My, unassigned, opinion is that I won’t be giving one penny to anyone who has that opinion. Buying stuff advertised on his site would be subsidizing him. I decline to do that. I, and many others, have let vendors know my opinion. The vendors have decided that they want my money more than they want to support him. People like his comics syndicate were advised that there would be little, if any, advertising support, and so dropped him, because they wanted my money more than they wanted to support him.

It is exactly the same with Ye. Very few support him. A very large majority despise him.

[Anonymous Coward]

Re: Doing a Musk

A very large majority despise him.

Actually, I'd say the large majority have never heard of him.

[Orv]

Re: Doing a Musk

There may be a lot of people who aren't following his current antics, but the guy sold 160 million records. He's not exactly obscure.

[Terry 6]

Re: Doing a Musk

About the same as Justin Beiber then. If you want a comparison figure.

[chivo243]

Adidas and Funko!

Maybe they can save space, and shove the Funko crap into the shoes before they burry them.

[Glenn Amspaugh]

Re: Adidas and Funko!

Make some kind of Adidunko powered AI to figure this all out.

[steviebuk]

Maybe, just maybe

They could take the hit for a change and donate them all to charity. Plenty of countries take shoes that are still wearable for people that can't afford them.

[jmch]

Re: Maybe, just maybe

What the CEO said is that they considered that, but decided not to since the recipients would simply sell them on for their cash value. Not sure why that's a point against. Presumably if they give them for free they don't owe West any royalties, the recipients can get cash value for them, and whoever buys them will be happy enough or ignorant enough to not care about the brand associations.

I'm also curious as to why they decided that re-stitching them is "not very honest". I haven't seen them but I suspect they are very distinctive / butt-ugly out of their very narrow target niche, so either the minimal work to hide a logo wouldn't really hide the branding (leading to royalty issues), and completely redoing them would be too expensive.

Last thing.... $1.3bn???? Even at really extortionate rates for a sneaker ($100+), that's 13 million pairs!!! Were they really expecting to sell that many???

EDITED to add.... I just had a look and (a) they range from bland to awful and seem to retail at $400-$2000+. Seriously WTF?????

[Neil Barnes]

Re: Maybe, just maybe

Well, yes... but a pair of trainers selling for two grand doesn't cost much more to make than a pair selling for fifty bucks, or thirty... they haven't _lost_ 1.3Bn, they're just not going to make that profit.

[John Brown (no body)]

Re: Maybe, just maybe

I was thinking that too and wondering if they can sell them at cost just to shift them. if there's no profit, hopefully that would mean no royalties (depending on the contract) and it demonstrates publically how much the "brand of Ye" is devalued.

On the other hand, if they sell them at cost, the world gets to see just how much a $2000 pair of trainers really cost and the obscene profits made simply by the name on the shoe.

[Luiz Abdala]

Re: Maybe, just maybe

If HP pulled that trick of selling at cost on their ink cartridges... "the world gets to see how much a $[#] inkjet cartridge really cost and the obscene profits made simply by the name on the ink tank".

(just to roll it back into IT)

[Doctor Syntax]

Re: Maybe, just maybe

" Were they really expecting to sell that many???"

PT Barnum wouldn't have shared your doubts.

[chivo243]

Re: Maybe, just maybe

Seriously WTF????? I just saw a headline that some young movie star(?) spent his first check on Air Jordans... Adam somebody, can't be arsed to look it up fo you.

[Gene Cash]

Re: Maybe, just maybe

Eh, I spent most of my first check on a BB gun. It's lasted 40+ years, so I guess that's better than a pair of shoes?

[Anonymous Coward]

Re: Maybe, just maybe

I've got a bunch that if the shoes are sent to poor countries, there might be a single recipient, whoever controls the strongest local militia.

Poor countries happen to also not be the best places to safely sell 2 grand pairs of shoes on eBay, no matter how well-intentioned we may be.

[John Brown (no body)]

Re: Maybe, just maybe

"I've got a bunch that if the shoes are sent to poor countries, there might be a single recipient, whoever controls the strongest local militia."

No need for hunches. There are many documented cases of donated goods to poor countries barely getting off the ship before they enter the cash economy rather than being distributed as intended. A friend of mine moved to an African country and also saw it first hand.

[moonhaus]

Re: Maybe, just maybe

"There are many documented cases of donated goods to poor countries barely getting off the ship before they enter the cash economy"

There are plenty of cases of similar things happening in rich/western countries as well. It's not an excuse to not try and help people, especially when it's an almost zero cost excercise.

[Woodnag]

Re: Maybe, just maybe

Donating the kicks to earthquake-hit Syria or Turkey was also struck off because the product would "come back again very quickly" due to its high market value, Gulden said.

So the footies DO have a market value then, and Adidas could retail them (for a lower price).

I suspect that if they enter the retail market by whatever method, for whatever price, the Adidas problem is simply that the sale cannnibalises Adidas's current shoe offerings.

[Anonymous Coward]

Re: Maybe, just maybe

and Adidas could retail them (for a lower price).

I think the problem is that if Adidas sells them, at any price, they're on the hook to pay him royalties, and they don't want to (be seen to) do that.

[AdamWill]

Re: Maybe, just maybe

You're just now learning about hypebeasts? Welp. Yeah. They're a thing.

[CowHorseFrog]

Re: Maybe, just maybe

Shame shareholders of Adidas dont sue the board for being morons and wasting their money.

[Doctor Syntax]

Re: Maybe, just maybe

The article deals with that. They'd just be sold back into the market and someone would make a big profit. It's doubtful that the someone would be the intended beneficiaries.

Maybe the best solution would be to donate them to a charity or charities who would sell them and use the proceeds.

[Yet Another Anonymous coward]

Re: Maybe, just maybe

>Maybe the best solution would be to donate them to a charity or charities

Doesn't solve the problem of shoes being seen on the street, and featured on the media, which are more associated with another Adolph than Adolph Dassler's company would like

[M.V. Lipvig]

Re: Maybe, just maybe

Not having seen the shoes (not interested in looking) Adidas should be able remove, not stitch over labeling, wire wheel any dyed in labeling, then redye the shoes a neutral color, then donate the shoes. It would require a small amount of extra cash per shoe to alter them sufficiently to not be salable as the originals, then write the whole cost off as a charitable donation. People needing shoes because they lost everything aren't going to care if they're ugly or plain, they'll just be happy to have some shoes to hold them over until they can rebuild.

Or, just take your lumps and sell them. Pay the agreed upon royalty to avoid taking the loss. Then make it company policy that there will be no further co-branding contracts allowed with individuals. Or better yet, no further co-branding at all. Yes, there's upside to co-branding, welcome to the downside.

[Sceptic Tank]

Things got ugly ===============>

Oh please do look. If I were an earthquake victim with no earthly possessions left I would probably be forced to wear those "shoes" out in public. But while I have a choice I would not be seen dead in them.

[DS999]

Donating them to earthquake areas

So either they get worn by people there who have lost everything, or they sell them for cash they desperately need.

Who cares if they make their way back to the US and are worn by some tool who thinks they are cool? That will be a good way to know who the biggest fools are and avoid them.

[doublelayer]

Re: Donating them to earthquake areas

The risk is that they're sold but not by the intended recipients. If you can really sell these for amounts they were trying to (earlier $400-$2k was quoted), there is a lot of incentive not to give them to any victim who would benefit either from shoes or money. Instead, someone with a lot of power, such as whatever armed group, including the Syrian military, is strongest, would take them and manage the selling operation. If the result of the donation is that you give millions to the Syrian army, and you don't have a guarantee it's someone as nice as them (which is kind of hard to imagine, but worse people do exist), then it's a rather negative result.

[ecofeco]

Re: Donating them to earthquake areas

This.

[fuserly]

Re: Maybe, just maybe

I am supposing that you didn't bother reading the article

[Oh Matron!]

"though The Register has always believed him to be hideous"

FTFY

[The Oncoming Scorn]

Re: "though The Register has always believed him to be hideous"

That or it's an art project or publicity stunt, but considering the self-sabotage and damage to his career, who really knows.

Or indeed who really cares (Other than minimal entertainment value).

[GruntyMcPugh]

Yeezus, them's some ugly shoes. It would be unfair giving them to earthquake survivors, they've been through enough.

[ParlezVousFranglais]

CEO Bjørn Gulden told analysts on a company earnings call on Wednesday: "The people that are saying send the shoes to Turkey or somewhere where people don't have shoes or there has been a tragedy happening, I think you agree that these are not normal shoes," he said.If the shoes were donated, "they will come back again."

So this heartless little shite is saying he won't donate his otherwise useless shoes to people who really need them, because they might sell them on? Surely the whole point of charity is to give something to people who have lost EVERYTHING. If someone who's house and worldly possessions have all just been completely destroyed, can sell on a pair of donated shoes to some rich idiot elsewhere in the world for a few hundred $$$, so that they can help to feed their family, and start to rebuild their lives then surely that's a great thing?

Talk about a business completely missing a trick - they could have been the business that ensured that no-one in the earthquake zone went without a decent pair of shoes - instead they've just proved that they are another business who has become completely detached from basic decency and humanity, and in this case it's not even putting the shareholders first - literally nobody wins just due to sheer corporate stupidity

[RockBurner]

One problem with this argument....

They're 'not' a "decent pair of shoes". They're fashion sneakers that are made for lounging around in. Actually use them for any other purpose (eg this new fad of 'walking') and they'll fall apart in no time.

You could even argue that by withholding them, he's saving the refugees more anguish.

[M.V. Lipvig]

A pair of shoes that will last a few months in a disaster zone is better than being barefoot in the same disaster zone.

[Gavin Park Weir]

Why can't they donate them to a number of good disaster charities (e.g. www.dec.org.uk) who then arrange to sell them for a profit and use the money to help people? It would be like a $1bn+ donation to charity and avoid the royalties issue.

[ParlezVousFranglais]

This is exactly what many people are suggesting, but Adidas' current position is that if they can't make a profit on them, then nobody else should be able to make a profit on them either, despite all the good it could do.

Tell's you all you need to know...

[Dave@Home]

It might also get them into a countersuit by Kanye.

If they dispose of goods and say they were shifted at zero cost, knowing the recipient was going to sell them at a higher price, they could well be open to a claim of trying to frustrate the contract Kanye has with them.

[Doctor Syntax]

"The people that are saying send the shoes to Turkey or somewhere where people don't have shoes or there has been a tragedy happening"

There is nothing in there that precludes donating them to a first world charity to raise money. In fact, the Beeb's report says "Adidas said it was considering selling the footwear and donating the profits to charity and had ruled out other options, such as burning them."

Of course they'll all end up in land fill one way or another.

[Anonymous Coward]

I don't believe there's a big line of charities waiting to be given stuff branded by an unhinged racist so they can sell it...

[Screepy]

@Doctor Syntax

"Of course they'll all end up in land fill one way or another."

Sadly not just landfill, pop over you YouTube and search

'No Lost Shoes | A film by Max Romey'

Only 10 min, an interesting, if rather dispiriting video.

I'm an ultra runner (a very amatuer one!) and have been trying out NNormal shoes - they're trying to stop shoes ending up in landfill (or on distant shores) - after you've worn out your shoe you can send them back to NNormal and theyll break them down again and recycle it all (hopefully)

[CowHorseFrog]

Why do you need this story to figure out that corporate leadership are scum of the earth ?

[Doctor Syntax]

My guess is that the people who sold them at a profit wouldn't be those in need, nor would they be just selling a pair but a container's worth. I can't blame him for wanting to feed a few black-marketeers.

[iron]

Those shoes are a visible symbol that a German company supported an anti-semite.

Now can you see why they don't want them to be worn by anyone?

[VoiceOfTruth]

If the shoe doesn't fit

Let them eat cake.

[Anonymous Coward]

What has this got to do with IT? Could someone explain the IT angle on this one.

[Dave@Home]

Bootsnotes, dullard

[Anonymous Coward]

Trainernotes, surely?

[mark l 2]

I don't know the tech / IT angle, but i do know Kayne West likes fish sticks

[JimboSmith]

I wish I could upvote you more than once for that reference.

[ParlezVousFranglais]

Excellent point - it's because while we're an ever more diverse and inclusive bunch, most of us on here are angst-ridden old blokes who need somewhere to vent our furious anger rather than rage-quitting and plunging the future of IT (and by extension the whole universe) into a dark and terrible future.

Articles like this therefore serve an excellent and useful purpose - it's not all happy blinkenlights...

[Excellentsword]

Adidas... has a website?

[Sceptic Tank]

My bet on the IT angle is that the shoes were designed by AI that was trained on medieval shoe designs

[Ball boy]

Not taking sides but...

Chances are, even if Adidas gave the damn things away they'd still have to pay royalties. Plus, it would be seen by many as Adidas profiteering (i.e. generating market awareness for being so 'generous') - and that itself would/could be translated into 'making a profit' and therefore fall under royalties conditions.

Mind you, I'm confused this statement: Destroying them would "raise sustainability issues,". What would happen differently if they were sold then? Maybe it's me, but I read that as saying "the environmental impact of our product lines cease to be a problem as long as they're sold and not in our warehouse".

[Insert sadsack pun here]

Re: Not taking sides but...

"What would happen differently if they were sold then?"

People would wear them and get some use out of them. If they're just burned, then 100% of the resources that went into them would be wasted.

[A. Coatsworth]

Re: Not taking sides but...

What would happen differently?

If they were sold and used for their intended purpose [1], then they would have provide value to the owner, for X amount of time. Even if eventually they end in a landfill, they would have provided a benefit. And in the end most anything will end in a landfill.

On the other hand, taking them from the manufacturer's warehouse straight to the dumping ground does sound like a crime against Mother Nature

[1] protecting someone's feet, and not being treated as collector/investor/especulator items

EDIT: Ninja'd by a Sadsack pun!

[CowHorseFrog]

Re: Not taking sides but...

If leadership still writes up a contract that pays royalties when they have to give away the product for free to charity - what does that say about the brainpower of the leadership ?

[Groo The Wanderer]

Heaven forbid they should consider donating them to charity instead of destroying them...

[Terry 6]

Charities tend to be a bit careful about their reputations..They need to retain long term donors in significant numbers. Not worth risking for a few pairs of dodgy footwear.

[John Sager]

I must confess that they look like something I would never wear in a million years, quite apart from the sleb marketing angle. Sad that the yoof of today is so brainwashed.

[Steve Button]

Where's the tech angle?

Oh, wait. It's in the "bootnotes" section, so that's fine. More than fine, it's like a section specifically made for this story.

[that one in the corner]

Re: Where's the tech angle?

> it's like a section specifically made for this story.

That would be the "sneakernotes" section.

For "bootnotes" you ought to be thinking of the music of Patrick Macnee and Honor Blackman, not Mr Ye (gods what was he thinking?).

[Alumoi]

$1.3 billion worth

To whom?

[yetanotheraoc]

Re: $1.3 billion worth

$1.3 billion to Adidas

$1.5 billion to Kanye

-$0.2 billion to humanity

[Nightkiller]

It's DEFCON 3. Defence Condition 3. That you choose not to be accurate and add to smear tactic reporting is everyone's concern.

[Anonymous Coward]

Uh, look up what Kanyeezywhatever actually wrote before you get all snippy.

The Reg’s reporting is accurate. And he’s an illiterate bigot.

[Tron]

The small print. Do it better next time.

Most large companies now expect comprehensive damages should they have to cancel anything because you offended the activist hordes on social media. This is the new normal. Even your ultra safe, family friendly tarento might queue jump when you least expect it.

[chivo243]

Adidas

All Day I Dream About Sex!

Instead of business... Now they're fscked. They can't consolably do anything them due to political correctness...

[Fruit and Nutcase]

Re: Adidas

Or, in the case of Bjørn Gulden, it would be

All Day I Dream About Shoes

[Trotts36]

Yeeeee

Did nothing wrong.

[IGotOut]

Re: Yeeeee

Says right wing troll.

[Woza]

I glanced at the picture before reading the headline and honestly thought I was looking at two artistic urinals. Only at a second glance after reading the headline did I realise they were shoes!

[Sceptic Tank]

Lets hope nobody else mistakes them for urinals if you take them off.

[AIBailey]

Well if you spent money on something that hideous, you'd certainly be taking the piss.

[Orv]

Ultimately they'll landfill them and use the loss to avoid paying taxes on their profits. I'm sure $1.3 billion is what the sneakers were expected to retail for, not the actual manufacturing costs, so they might even come out ahead in the deal.

[yetanotheraoc]

Ultimately

Yes, they are choosing to paint themselves in that corner. In the meantime they are getting the most mileage possible from the "doing the right thing is going to cost us so much money" angle. It's an ideal distraction from the "what were you thinking going into business with Kanye" angle.

[yetanotheraoc]

Keeping Up With the Kardashians

Many years ago I was out having pizza and this show (see title) was on. It wasn't watchable, but I gathered it was about surgically altered people standing around talking about new ways to make money by looking attractive. I specifically remember saying to a pizza parlor employee that Bruce (sic) Jenner was in over his (sic) head with that crowd. Hah! So little did I know! Anyway, more recently Kim dumps Kanye just before the meltdown, good for her. I haven't been thinking about the Kardashians much, but extrapolating from a couple of data points I conclude the Kardashians' true talent is finding people crazier than themselves to hang out with. EDIT: Or is hanging out with the Kardashians the wrong thing to do?

[Fruit and Nutcase]

Re: Keeping Up With the Kardashians

surgically altered... looking attractive.

Surgically altered, but looking attractive? As they say, beauty is in the eye of the beholder.

[ecofeco]

Cry me a river

Rich people fighting each other? Oh noes!

[that one in the corner]

Yeezy come, Yeezy go

Oh come on, don't moan, someone had to say it eventually!

[Sceptic Tank]

Ending up in Ye olde landfill?

Don't know if they are still floating about, but there was ye story of the plastic ducks that landed up in on ye ocean and were being used to track currents. Maye "steps" should be taken to dump ye stock in ye sea in ye name of science.

My first though was to damage them sneakers so they won't have much resale value and donate them to children in Africa who don't have food, but have funky footwear. But looking at those designs, taking a knife to them would probably make them look better.

[sarusa]

‘$1.3 billion’

$1.3B of sales price means about $50m worth of actual cost to make them. These are semi luxury items which means the markup is insane.

[IGotOut]

Sooo...

they don't want them in landfill?

So what happens normally to them at their end of life? Turn to magic pixie dust and help power rainbows?

Oh you mean it's YOUR problem and expense, rather someone else's.

[Richard 12]

Re: Sooo...

These were intended as luxury items for speculators & collectors. Not as actual footwear.

Much like many fine wines, nobody was ever going to actually use them. They were supposed to get passed from collector to collector.

[spoofles]

$$ + Mouth

Maybe the board and execs at Adidas can contribute their already bloated salaries to reimbursing stockholders who paid for their politics.