Adidas severed ties with Ye after he made antisemitic remarks

Adidas Cancels Yeezy: An apology to Adi, the artist and designer behind the Sapp-Carlson curtain after World War II

adidas has cut ties with Ye, the artist and fashion designer who used to be called West, after recent antisemitic comments made by him.

Gerome Sapp, the chief executive of Rares, says that the fractional investment corporation had intended to let its investors cash out of the now- canceled sale at Christie’s when it came to the Yeezy prototype.

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 isolate Ye in the wake of a string of incendiary remarks, including that slavery was a choice and a leaked interview between Ye and Fox News host Tucker Carlson, in which he said, “I’d prefer my kids knew Chanukah than Kwanzaa, at least it would come with some financial engineering.”

Jonathan Greenblatt, who leads the ADL, said in a statement on Tuesday that Adidas’ action “sends a powerful message that antisemitism and bigotry have no place in society.”

The shoe factory of the brothers was converted into a munitions plant at the end of World War II because they were members of the Nazi party.

The two had started manufacturing footwear, including spiked shoes, in Bavaria during the 1920s and were propelled to international fame after the 1936 Olympics in Berlin, where legendary Black U.S. sprinter Jesse Owens won four gold medals wearing a pair of track spikes from the Dassler brothers.

An acrimonious rift between them led to the two splitting off: Adolf Dassler, known as Adi, founded Adidas in 1949. His brother started a rival shoemaker across the river from Adidas’ operations.

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German law says that inciting hatred towards people of a certain race or religion can result in prison time.

In response to the social media companies locking down his accounts, Ye announced that he was purchasing the conservative-friendly Twitter knock-off company Parler, in a move that puzzled tech observers. Details of the transaction have yet to be 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 dumping it. Resellers are blocking new product listings associated with it. TJ Maxx and other stores don’t want anything associated with West, the controversial rapper who has legally changed his name to Ye.

There are only a few ways to hold onto a Ye shoe, Mr. Sapp said, naming the last shoe he made with Nike as a prime example. Mr. Ljustina also said that a majority of Yeezys sold for much less than Jordans — for prices closer to their original retail price — in part because there are so many more of them in circulation. He also said that the loss in profit on shoes offset the gain in volume.

Yeezy, Adidas, and the Environmental Impact of Distressed Retail Merchandise: An Expert Report on GoTRG

“There really are no good options for this distressed brand that sat somewhere between prestige and luxury,” said Burt Flickinger, retail expert and managing director at retail consultancy Strategic Resource Group.

“Gap has stated that it will not sell the remaining items,” said Swartz. Adidas will probably release some products under its own name as well as destroy some merchandise and that is likely to happen. Adidas has stated that it will not pay any more royalties to Yeezy.”

Marshall Fisher is a professor at the Wharton School of the University of Pennsylvania who studies retail operations and supply chain management.

There’s the environmental impact of destroying or disposing of unsold merchandise. Making clothing and other apparel already comes at a high environmental cost because of the resulting green house gas emissions, significant water use, water pollution and textile waste. Typical methods for destroy unwanted clothing — such as using incinerators — only compounds the problem.

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 in secondary markets.

“Companies like ours that run secondary marketplaces are going to be just as reluctant to sell products associated with Ye’s brands as the retailers currently are,” said Sender Shamiss, CEO of goTRG “A big portion of this product will likely end up in donation bins, recycling bins, or landfills.”

Rebranding merchandise to camouflage the controversy is another common industry tactic, experts say. It involves removing the distressed brand’s logo, or disguising it in some way.

When it comes to problematic merchandise, sending it oversees to countries based on need and where durability of product matters more than the brand or fashion, is an industry fallback.

Sneaker Resale Revenue Slashed: Why Yeezys, Nike and Air Jordan are the Most Popular Products in the Middle East, Europe and China

In a paper written by Peter Bug and Moritz Lutz, they found that Nike, Air Jordan and Adidas accounted for 98% of the total revenue in the global sneaker resale market. And when it comes to the Adidas share, Mr. Ljustina of Project Blitz said, most of that is 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 warned on Thursday that its revenue and income will be slashed because of the company’s decision not to sell existing merchandise.

It is a common issue for the retail industry to get rid of unwanted, leftover products or figure out how to reuse them. Reselling inventory at a discount, donating or upcycling are different options that companies consider.

“There’s no way to get out of this gracefully or profitably,” Matt Powell, a footwear retail expert who has worked with Adidas, said. The question is, can they lighten the bad things that are going to happen?

“All of this work is extremely labor intensive and it can only be done one shoe at a time,” he said. It’s not cheap to go through this process.

The Effect of Repurposing Products on a Brand’s Image: Adidas vs. Developing Countries in a Foam Running Shoe

Consider the foam runner — a futuristic slip-on with sculpted lines and a monochrome finish. Adidas could try to sell its own version of the foam runner, but consumers may still associate the shoe with its former designer.

Generally, repurposing products at a deep discount could have consequences for a brand’s reputation. So companies look to smaller markets, likely in developing countries, to make a profit without hurting their image in big consumer markets such as the U.S. and Europe.

He said that removing the labels will still be important in the strategy, and that it’s possible smaller markets won’t be interested in the 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.