Adidas exec talks Yeezy design future on earnings call
The compaby ended its partnership with Ye in October
Red Banyan founder and CEO Evan Nierman and Ericho Communications CEO Eric Yaverbaum debate how Adidas managed the Ye controversy on 'The Claman Countdown.'
Adidas AG Chief Financial Officer Harm Ohlmeyer on Wednesday discussed the future of Yeezy sneaker designs on the retail giant’s third-quarter earnings call.
"Adidas is the sole owner of all design rights registered to existing product as well as both previous and new colorways under the partnership, and we intend to make use of these rights as early as 2023," Ohlmeyer said.
A split photo of the Adidas logo on a sign and Kanye West at the Supreme Courthouse in New York City (REUTERS/Andrew Kelly/File Photo/Steve Eichner/WWD/Penske Media via Getty Images)
Adidas announced in late October that after a "thorough review," it had decided to end its partnership with rapper Ye, formerly known as Kanye West, citing antisemitic remarks he made. The termination of the partnership involved Adidas halting production of Yeezy-branded items and ceasing payments to the rapper and his companies "with immediate effect," the company said in a release at the time.
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Accounting for impacts due to ending the Yeezy partnership, Adidas on Wednesday adjusted its fiscal 2022 outlook to project €250 million in net income. It said its former partnership with Ye had "high seasonality" that was "geared towards the fourth quarter."
A sign advertises Yeezy shoes made by Adidas at Kickclusive, a sneaker resale store, in Paramus, N.J., Tuesday, Oct. 25, 2022. (AP Photo/Seth Wenig)
"Going forward, we will leverage existing inventories, with the exact plans being developed as we speak," the CFO said Wednesday, adding that the company would also save money on royalties and marketing fees once related to the partnership.
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Ohlmeyer, later speaking during the question-and-answer portion of the call, repeated that Adidas was the "sole owner of IP rights of current and future colorways" for Yeezy shoe designs. An analyst had asked him about whether the plan was to "rebrand them as Adidas."
"And, of course, we have a lot of things in the archives as well, so definitely there are different plans that we are vetting right now," he continued. "Again, too early to say when and how we come up with these plans. But it’s definitely current product but also future products and, as you say, not under the Yeezy label, but we also look at the current inventory that is relevant enough to close the gap in 23 compared to 22."
Kanye West arrives at the Vanity Fair Oscar Party in Beverly Hills, Calif. Rapper and fashion mogul Ye’s high-end clothing company Yeezy has agreed to pay $950,000 to settle a lawsuit over slow shipping to customers. (Photo by Evan Agostini/Invision … (Photo by Evan Agostini/Invision/AP, File) / AP Newsroom)
Adidas reported €6.4 billion in third-quarter net sales, an 11.4% increase from the €5.75 billion it generated in the same period last year. Its net income from continuing operations narrowed to €66 million from €479 million.
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The same day Adidas announced it had terminated its partnership with Ye, Gap Inc. said it was removing Yeezy Gap items from store shelves and shutting down the website associated with the apparel line.
Julia Musto contributed to this report.