Adidas to Sell Some Yeezy Stock, Donate Proceeds

FILE PHOTO: The Adidas logo is pictured during celebrations for German sports apparel maker Adidas' 70th anniversary at the company's headquarters in Herzogenaurach, Germany, August 9, 2019. REUTERS/Andreas Gebert/File Photo
FILE PHOTO: The Adidas logo is pictured during celebrations for German sports apparel maker Adidas' 70th anniversary at the company's headquarters in Herzogenaurach, Germany, August 9, 2019. REUTERS/Andreas Gebert/File Photo
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Adidas to Sell Some Yeezy Stock, Donate Proceeds

FILE PHOTO: The Adidas logo is pictured during celebrations for German sports apparel maker Adidas' 70th anniversary at the company's headquarters in Herzogenaurach, Germany, August 9, 2019. REUTERS/Andreas Gebert/File Photo
FILE PHOTO: The Adidas logo is pictured during celebrations for German sports apparel maker Adidas' 70th anniversary at the company's headquarters in Herzogenaurach, Germany, August 9, 2019. REUTERS/Andreas Gebert/File Photo

Adidas will sell some of the merchandise from its defunct Yeezy partnership with rapper Kanye West and donate part of the proceeds to international organizations, CEO Bjoern Gulden said on Thursday.

The German sportswear giant has been in a predicament over the Yeezy stock since it cut ties with West over his
anti-Semitic comments late last year, with the controversy weighing on its stock and hitting its bottom line.

Millions of Yeezy brand shoes with a retail value of 1.2 billion euros ($1.3 billion) are sitting in storage after their
sale was put on hold.

Their value in the resale market has rocketed since Adidas stopped producing them, with some models more than doubling in price.

Addressing investors in the southern German town of Fuerth after the debacle contributed to the company's first annual loss in 31 years, Gulden said it had yet to be determined when and how the planned sale would proceed.

"What we are trying to do now over time is to sell some of this merchandise ... burning the goods would not be a solution," he said, adding the proceeds would be donated to international organizations that West, who changed his name to Ye in 2021, had harmed with his comments.

Shares in Adidas were up 2.2% at 1000 GMT, Reuters reported.

"It's a smart and responsible move," said Ed Stoner, a sportswear industry consultant who previously worked at Adidas, adding it "not only preserves the brand's integrity but avoids a sustainability crisis."

By selling some of the stock, the company is potentially minimizing a $700 million loss this year, but it is unclear how much stock will be sold and what proportion of the proceeds will be donated.

If the goods are sold, Ye will be entitled to previously-agreed commissions - 15% of turnover, according to media reports. Adidas has declined to comment on this.

Gulden defended Adidas' years-long collaboration with the rapper, saying that "as difficult as he was, he is perhaps the most creative mind in our industry".



Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
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Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)

Birkin-bag maker Hermes reported a 13% rise in second-quarter sales on Thursday, demonstrating the continued appetite from wealthy shoppers for its luxury handbags, even as less affluent consumers pull back.

Sales at the French luxury group grew to 3.7 billion euros ($4.02 billion), a 13% organic sales rise that strips out currency fluctuations. The figure was in line with analyst expectations, according to a Visible Alpha consensus.

Operating profit for the first half was 3.1 billion euros, compared to a forecast from consensus provider Visible Alpha for 3.2 billion.

One of the most steady performers in the luxury goods sector -- even as economic conditions worsen -- the French group's results stand out after a string of disappointing earnings updates from peers which have raised investor concern about uncertain prospects for the sector in the coming months.

Hermes' famously classic designs and tight management of production and stock have helped reinforce the label's aura of exclusivity, and CEO Axel Dumas told reporters the company had seen "no big interruption in trends".

However, he said Hermes was seeing slightly less traffic with aspirational clients, which was impacting higher volume products like fashion accessories.