Analyst: People Still Want to Buy Yeezys, Despite Controversy
Yeezy founder Kanye West may be one of the more controversial figures in fashion, but that hasn’t stopped people from buying his shoes, according to one analyst.
Adidas‘ recent Yeezy launches quickly sold out and are currently reselling for premiums on the resale market, according to a Monday note from Wedbush analyst Tom Nikic. The launches, which included 12 pairs of shoes, occurred through a two day period starting in late May.
“It appears as though consumer demand for these products still exist, so at the very least, Adidas should be able to sell through the inventory that was already in place when they terminated the partnership with Mr. West,” he wrote, adding that while the total number of pairs was relatively low, the strong response suggests that “demand for the Yeezy products has not been impaired.”
After officially parting with West and his Yeezy brand in October in light of repeated antisemitic statements, Adidas last month announced it would start selling its existing Yeezy products and donate a “significant” portion of proceeds to organizations representing people who “were hurt” by Kanye West’s comments and behaviors. The announcement came after Adidas weighed a variety of options for what to do with the leftover $1.3 billion (or 1.2 billion euros) worth of Yeezy product.
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The recent Yeezy launches included existing designs with some new colorways. Nikic also cited Google trend data that showed an increase in interest for Adidas and Yeezy in the last week.
Prior to relaunching Yeezy sales, Adidas had grappled with debilitating sales losses with the termination of the Yeezy partnership. In Q4, the German sportswear company’s revenues fell 1% in currency neutral terms to 5.2 billion euros, reflecting a negative impact of around 600 million euro related to the loss of the Yeezy business. And last month, Adidas reported a revenue decline of 1 percent to 5.27 billion euros. Adidas CEO Bjørn Gulden said Adidas’ Q1 sales growth would have been 9 percent if not for the Yeezy problem.
“While it is uncertain how this will translate into Q2 sales, we believe that the impact could be significant,” Nikic wrote. “The fact that all Yeezy products sold out promptly and are now being sold at premium prices in the aftermarket indicates a strong demand and potential for positive sales momentum. As we continue to monitor market dynamics, the performance of Yeezy in Q2 will be an important factor to watch, as it has the potential to act as a significant needle mover for Adidas’ overall financial performance.”
