Adidas intends to sell Yeezy designs without the name

By Kim Bhasin, Bloomberg

Adidas AG intends to sell existing Yeezy product designs using its own branding after ending its partnership with rapper and designer Ye, formerly Kanye West.

Adidas management has indicated that it will start selling the products under the company’s brand at the beginning of next year, according to analysts at Morgan Stanley and RBC Capital Markets. That follows the dissolution of the lucrative tie-up, which Adidas has described as one of the industry’s most successful ever, after Ye made antisemitic comments.

“Looking ahead, on our understanding, the company will not sell any Yeezy-branded products and all Yeezy products will be branded under Adidas brand,” Morgan Stanley analyst Edouard Aubin said in a note to clients Tuesday.

The company has already been under pressure from investors over weaker demand in China and production delays.  In speaking to analysts, Adidas focused on the potential upside of dissolving its partnership — fewer expenses.

“Adidas has the rights to existing Yeezy product designs and can sell these using Adidas branding (not Yeezy branding) following the termination of the Yeezy partnership, which Adidas intends to do” in the first quarter of next year, RBC analyst Piral Dadhania said in a note. “Speaking to the company, it believes it can limit the loss of revenues through this strategy, and will also save on expenses related to royalty and marketing fees no longer payable in 2023.”

A spokesperson for Adidas didn’t immediately respond to a request for comment.

Read more: Ye’s Antisemitic Rants Wreck Path to Multibillion-Dollar Fortune

In a statement Tuesday, Adidas condemned antisemitism and racism and said it would immediately end its relationship with Ye. The company said it would cease production of Yeezy-branded products and halt all payments to Ye and his businesses, but added that it’s the owner of the Yeezy design rights.

“Adidas is the sole owner of all design rights to existing products as well as previous and new colorways under the partnership,” the company said.