Adidas and the Adidas-Adida Cross-Correlation after the Adidas/Jewish-Poel-Death Debate
Since he began making inflammatory comments, Adidas has moved away from Ye. The Creative Artists Agency and the fashion house parted ways with him.
The German company’s partnership with Ye helped make the rap star a billionaire and gave him a brand of sneakers that went to a global audience.
Twitter and Instagram suspended Ye earlier this month after making antisemitic posts, including a post on Twitter threating to go “death con 3 on JEWISH PEOPLE.”
The company is the latest to ostracize Ye after a string of controversial statements including that slavery was a choice, and that he wanted his kids to know Chanukah.
Ye wore a “White Lives Matter” shirt during Paris Fashion Week, prompting Adidas to review its partnership with him. The Anti-Defamation League considers the slogan, which has been embraced by white supremacists, a symbol of hate speech.
The shoe factory of the Daslers was converted to a factory for the war effort after they were members of the Nazi party.
The two brothers were well-known in the United States and internationally after Jesse Owens wore their spiked shoes to four gold medals in the 1936 Olympics in Berlin.
An acrimonious rift between them led to the two splitting off: Adolf Dassler, known as Adi, founded Adidas in 1949. The brother of Adidas’ brother started a rival shoemaker.
The Adidas Loss of Kanye West, or A Case Study in Inciting Hate: The Case of Yeezy-Chiral rapper Ye
German law makes inciting hatred against certain people of a certain race or religion a crime and can result in prison time.
Ye made a move that puzzled tech watchers, after announcing he was purchasing a company that makes knock-off micro-messaging site Parler, in lieu of locking down his accounts. The transaction’s details haven’t been made public.
The rapper has said he intends to build his own “Yecosystem,” which would include his own factories and retail stores as a way of fully separating himself from the corporate world.
Retailers are moving it to another location. New product listings are being blocked by the reselling companies. Even off-price outlets like TJ Maxx don’t want any goods associated with hate-speaker Kanye West, the embattled rapper who has legally changed his name to Ye.
It’s a dramatic fall from grace for a once highly-coveted label, especially the Yeezy-branded sneakers that commanded thousands of dollars on the resale market.
There were no good options for this distressed brand, that was somewhere between prestige and luxury.
Gap will most likely have to destroy or dispose of its unsold goods, according to an analyst.
One option for Adidas is to remove Yeezy-identifying labels and attempt to resell its inventory at its own stores and its retail partners for a discount. That strategy may be Adidas’ best bet to turn some profit, Powell said, but repackaging the merchandise comes with its own challenges.
Killing or disposing of unsold merchandise can have an adverse impact on the environment. Green house gases, water use, and textile waste are some of the high environmental costs of making clothing and other apparel. Typical methods for destroy unwanted clothing — such as using incinerators — only compounds the problem.
Yeezys, Nike and Adidas: What is the impact of re-branding merchandise? A study by GoTRG chairman Moritz Lutz and Peter Bug
GoTRG is a product returns management company that processes over 100 million distressed, unsold, or returned items annually for manufacturers, online retailers and big-box chains. They anticipate a backlash against the Yeezy brand even in secondary markets.
Many products associated with Ye’s brands will end up in donation bins, recycling bins, and other places, according to the CEO of go TRG.
Experts say that re- branding merchandise is a common industry tactic. It involves removing the distressed brand’s logo, or disguising it in some way.
Sending problematic merchandise to countries that are in need and don’t care about the brand or fashion is an industry fallback.
In 2018, a paper from Moritz Lutz and Peter Bug of Reutlingen University in Germany found that Nike, Air Jordan and Adidas accounted for 98 percent of the total sneaker resale market revenue globally. According to Mr. Ljustina of Project Blitz, most of the Adidas share is dedicated to the brand’s premium products such as Yeezys.
And yet, said Mr. Ljustina, Yeezys are very popular among international buyers in Russia, the Middle East and China, who may not care so much about what Ye said.
Adidas said in a profit warning that it expects to lose about one billion euro in revenue this year due to its decision not to sell existing merchandise.
Retail industry is faced with getting rid of products and figuring out how to reuse them. Companies can resell inventory at a discount, donate or upcycle.
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“You can’t get out of this gracefully or profitably because of the situation,” Matt Powell, a footwear retail expert, said. The question is: how can they make things better?
“All of this work is extremely labor intensive and it can only be done one shoe at a time,” he said. This process is very costly, so that’s why.
The foam runner is a slip-on with sculpted lines. Consumers may associate the shoe with its former designer, even if Adidas tries to sell its own version.
A brand’s reputation could be adversely impacted by the repurposing of products at deep discounts. Companies look to smaller markets in developing countries for profit and to not hurt their reputation in the big consumer markets of the U.S. and Europe.
The removal of the Yeezy labels will be important to this strategy, even if smaller markets are not interested in discounted products given its reputation.
On the other hand, Fisher said donating the goods “is much better for reputation and for sustainability,” and it would be a viable option for Adidas if it decided not to turn a profit.