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".



Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
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Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)

Kering reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half, as the French luxury group struggles to revive its key label Gucci and worries grow about a prolonged downturn in high-end spending.

Sales at the French luxury group which owns labels Gucci, Boucheron and Balenciaga, fell to 4.5 billion euros ($4.9 billion), an 11% drop on an organic basis, which strips out currency effects and acquisitions.

The figure was below analyst expectations for a 9% drop, according to a Visible Alpha consensus.

It also said second-half operating income could fall by around 30%, following a 42% drop in the first half.

Sales at Gucci fell 19%, showing no improvement from the first quarter, and below analyst expectations for a 16% decline, according to a Visible Alpha consensus.

Kering has been revamping Gucci, the century-old Italian fashion house which accounts for half of group sales and two-thirds of profit.

Minimalist designs from new creative director Sabato de Sarno, which began trickling into stores earlier this year, are key to the design reset and push upmarket, in a bid to cater to wealthier clients who are more immune to economic headwinds.

Kering chief financial officer Armelle Poulou told reporters that the designs had been well received and the rollout was on track.

But the efforts have been complicated by a downturn in the global luxury market, while China's rebound - traditionally Gucci's most coveted market - was clouded by a property crisis and high youth unemployment as Western markets came down from a post-pandemic splurge.

Earnings from sector bellwether LVMH on Tuesday missed expectations as sales rose 1%, offering few signs that a pickup is around the corner, sending shares in luxury goods companies down on Wednesday. Kering traded at its lowest level since 2017.