Adidas plans to rebrand YEEZY to make up for losses

It is reported that adidas has decided to terminate the cooperation with Kanye West last week, and emphasized in the statement that it still owns all the design rights of YEEZY‘s existing products and the old and new color matching under the partnership, and is also the sole owner.

Capital analysts from Morgan Stanley and Royal Bank of Canada revealed that adidas management plans to start selling adidas-branded YEEZY sneakers next year and rename all YEEZY sneakers to strategically make up for losses. After adidas previously terminated the contract, it will earn 250 million euros or about 1.8 billion yuan less in the fourth quarter.

Terminate the cooperation and stop the production of Yeezy series products.

After 9 years of cooperation, Adidas recently announced that it was breaking up with Kanye West.

Kanye West, who is habitually called “Kan Ye” by domestic fans, is not only a famous American rapper, but also a well-known designer in the fashion circle. Its most well-known design work is the popular “Yeezy shoes” – Yeezy series of trendy shoes.

As the most popular trendy shoe series under Adidas in recent years, the discontinuation of “Yeezy shoes” is tantamount to “cutting meat”. According to the financial report data, it accounts for as high as 8% of the company’s overall sales. In 2021, Yeezy series sales will be nearly 1.7 billion US dollars, a year-on-year increase of 31%.

“I had gradually lost interest in Yeezy 350, but I still wanted to buy a few pairs after learning the news.” On October 27, Li Fei, who had just placed an order for 2 pairs of shoes, told the Beijing News Shell Finance reporter.

In the trendy shoe circle, Yeezy shoes have always brought their own halo. The Beijing News Shell Finance learned that the issue price of Yeezy 350 series sneakers is basically set at around $200. The most well-known styles are “Gypsophila”, “Dark Warrior” and “Angel”, which were once hyped on the market. shape. Among them, a pair of Gypsophila used to have the highest premium of tens of thousands of yuan.

Sales reached 1.7 billion US dollars, “Yeezy shoes” ≈ the king of gold

“Adidas’s shoes rarely choose other styles except Yeezy.” Han Lu, a Chongqing fashion shoe player, told Shell Finance reporter that he has been in the pit since 2016 and has bought more than 10 pairs, “If it really stops production, in the future Probably not considering Adidas.”

Shell Finance reporter learned that in addition to Yeezy, Adidas also has a number of popular trendy shoes such as the NMD series that once caused domestic players to snap up at high prices and the Shell series that are highly respected by young people. However, with the shift of player choices in recent years, the latter two have gradually lagged behind the Yeezy series in terms of popularity and influence.

This means that once the production of Yeezy is completely discontinued, it is likely to have a considerable impact on Adidas’ performance.

Adidas also revealed in a statement that, given the high seasonality in the fourth quarter, the shutdown will have a short-term negative impact of 250 million Euros (about 1.8 billion yuan) on the company’s net profit in 2022.

In fact, Adidas was not Kanye’s preferred partner, but unexpectedly became a trump card for his opponents.

As early as 2008, Kanye collaborated with Nike to launch his first Yeezy series.

In February 2008, at the 50th Grammy Awards, Kanye stepped on the “Air Yeezy 1” to attend the scene and performed his masterpiece. This is the first time that Nike Air Yeezy has appeared in public and successfully opened the “Yeezy era”.

In 2013, the two sides announced the end of the cooperation due to multiple factors such as Nike’s refusal to pay royalties. Kanye switched to the arms of Nike‘s long-term rival, Adidas.

Since then, the two sides have jointly launched the Yeezy Boost series, which has attracted the attention of the trend circle since then, and has become the trend vane of trendy shoes for many years.

In February 2015, Adidas’ first “Yeezy boost 350” and “Yeezy boost 750 series” were officially released, which quickly caused a sensation in the shoe circle.

“750 is not an extravagant hope. After all, the price is high, and ordinary players can’t get the first start. But at that time, everyone wanted to start the white 350 as soon as possible.” On October 27, senior fashion shoe player Dai Ke told Shell Finance reporter , Yeezy 750 was released in only 9,000 pairs worldwide, and the price was once fired to tens of thousands of yuan.

During that time, more players set their sights on the Yeezy 350. On the day the sneakers went on sale, stores in Europe and Canada were out of stock in less than an hour, and in the United States it was sold out in just 15 minutes.

“Almost all the domestic shoe circles are paying attention to this news and looking for various channels to buy. Although the original price of one or two thousand yuan sneakers has been fired to more than $1000, but few people who grab it are willing to sell it, they would rather Collection for yourself.” Dai Ke said.

The popularity of Yeezy has not only made Adidas more popular than other competitors, but also brought huge economic benefits to the company.

According to public data, as early as 2019, the annual sales of Yeezy series has exceeded 1 billion US dollars, and it has continued to increase since then.

Adidas once said that “the cooperation between the two parties is one of the most successful in the history of the industry”. Its financial report data shows that the Yeezy series is the company’s “top sales”, accounting for up to 8% of its sales. In 2021, Yeezy series sales will be nearly 1.7 billion US dollars, a year-on-year increase of 31%.

However, as Yeezy continues to be popular in the market, Adidas and Kanye gradually have conflicts in the distribution of interests.

In 2020, Kanye asked to enter the Adidas board of directors, otherwise the cooperation will be terminated, but Adidas officials have not responded. In September 2022, Kanye said on his personal social media platform that Adidas wanted to spend $1 billion to buy Yeezy, but he refused, and the acquisition was finally over.

In the eyes of the outside world, perhaps the two sides have been estranged before, and this incident is just a fuse, causing the two sides to completely terminate their cooperation.

The tide shoe circle “lost its light”, and the secondary market once fell to the freezing point

Adidas announced that it will stop producing Yeezy products, and some players have the idea of purchasing or frying shoes. However, Shell Finance reporters searched multiple trading platforms and noticed that the secondary market did not cause players to snap up.

On October 27th, a reporter from Shell Finance and Economics logged on the domestic sneaker platform “Dewu” and found that a variety of Yeezy 350s were recently traded. Taking the “Yeezy 350 V2’Light’ Daisy” as an example, the transaction reached nearly 100 pairs within 24 hours. . But the price of sneakers did not fluctuate much, and even declined. Also taking the 43-yard-one third of this sneaker as an example, the transaction price was $310 a day ago, and the latest transaction price was $300.

“It’s okay to buy a pair of shoes for collection or to wear by yourself. If you enter the market with the idea of selling it, it is very likely that you will end up ‘smashing it in your hand’.” Analysis of shoe dealer Lin Lei, “On the market Yeezy is saturated, players who like it have already started, and players who don’t like it are unlikely to place an order because the shoe is discontinued.”

Lin Lei remembers that in 2015, he spent nearly one million yuan to buy a large number of Yeezy 350 trendy shoes from overseas, and then sold them at a premium in China and made a lot of profit. With the continuous upgrading of Adidas in the later period, the market demand has gradually decreased. The prices of previous popular versions, including Mangypsophila and Black Warrior, have declined. The price of ordinary versions has fallen to around $300, or even lower. “Now that the golden period of sales is over, who dares to stock up?”

According to media reports, Yeezy’s second-hand market value has continued to decline. According to data from the sneaker platform, the hot-selling Yeezy Boost 350 V2 Beluga has dropped from a peak of $1,003 in 2021 to a freezing point of $325, and the price has evaporated by nearly 67%.

Another shoe dealer also told the Shell Finance reporter that it is not as easy as imagined to make a profit in the sneaker market. Many new entrants do not know which trendy shoes will be popular, but simply judge the market based on their own preferences. got stuck. “Not every shoe can increase in price, and many may experience a sharp drop in price. If you blindly stock up and expect follow-up hype, you may lose all your money.”

The rise of the national tide, Adi fans urgently need new products

In recent years, the circle fan routine of Yeezy shoes has been seen through and gradually stepped down from the altar.

Many players told Shell Finance reporters that it has been 9 years since Yeezy was born. At first, it attracted market attention with its novel appearance and comfortable foot feel brought by Boost technology, but the product has hardly improved in recent years. “In addition to frequent color changes, there are few other upgrades. After a long time, many players gradually lose the original freshness.” Li Fei said.

Dai Ke also told the Shell Finance reporter that compared with the bold innovation of trendy shoes by national fashion brands and some niche brands, Adidas’ long-term unchanged design has fallen behind. “Now Yeezy 350 has been rotten on the street, and it feels far less popular than before.”

According to the third-quarter performance report released by Adidas on October 21, sales in the third quarter of 2022 were 6.408 billion euros, a year-on-year increase of 11%; net profit was 179 million euros, a year-on-year decrease of 62.6%. Revenue in Greater China was under pressure in the third quarter, with a double-digit year-over-year decline.

“In the past, Yeezy was the most popular Adidas trendy shoes in the circle. Although the NMD series has also been popular for a while, the current sales cannot be compared with Yeezy.” Lin Lei told reporters that now with the national tide Gradually rising, domestic consumers’ choices have also begun to diversify, and many young people have begun to accept domestic brands such as Anta and Hongxing Erke. “If Adidas does not have ‘successful’ products, sales are likely to decline in a short period of time.”

Many sneaker players have gradually abandoned overseas brands in favor of domestic products. Yueyue, a post-95s fashion shoe enthusiast, told the Shell Finance reporter that the influence of brands such as Adidas and Nike in China is far from comparable to that in their heyday. I and my friends seldom chose domestic fashion shoes before, but now they also deliberately choose domestic brands when purchasing.

Unlike Adidas’ net profit decline, Li Ning’s 2022 interim results announced in August showed that in the first half of this year, Li Ning achieved operating income of 12.409 billion yuan, a year-on-year increase of 21.7%; net profit attributable to the parent was 2.189 billion yuan, an increase of 11.6% year-on-year. According to the 2022 semi-annual report released by Anta, the revenue in the first half of the year was 25.965 billion yuan, a year-on-year increase of 13.8%.

Notably, Adidas said in the announcement that “Adidas is the sole owner of all design rights for existing products and previous and new colorways under the partnership.”

CNN interviewed a number of legal experts in this regard, saying that although Adidas’ statement clearly stopped selling Yeezy-branded products, it may rename existing Yeezy designs.

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