What's Next for Adidas?

Just over a month ago, Adidas formally announced that they had terminated their partnership with rapper and fashion designer Kanye West due to his antisemitic comments on Twitter. The end of this collaboration sparked a lot of discussion on how Adidas will move forward given that the collaboration accounted for a large portion of its revenue. The partnership lasted seven years and transcended the Adidas brand financially as well as culturally. While it's no surprise that the brand terminated the partnership, however, the question on everyone's mind is what will Adidas do next?

I’ve worked in the sneaker industry for almost five years and I’ve seen firsthand not only the influence the collaboration has had from a financial standpoint but also from a cultural and social aspect. Prior to the collaboration, the perception of Adidas was considerably different. Adidas was perceived as strong when it came to sportswear for basketball and soccer with endorsements from popular athletes such as Derrick Rose, Damian Lillard, and Lionel Messi. However, the perception of the brand as a lifestyle brand was lacking. When Adidas decided to partner up with West, the perception of the brand amongst sneaker enthusiasts and fashion connoisseurs completely changed. Adidas established itself as a big player in the sneaker resell market, something that they had little success with prior to their collaboration with West.

Following the termination of the partnership, I had my own predictions for what Adidas would do next. The models associated with West account for a large portion of revenue and Adidas has ownership of the patents associated with these models. I predicted that Adidas would continue to release Adidas Yeezy models but remove the ‘Yeezy’ name upon release. This way they could continue to release popular models without West’s name attached to the collaboration. It turns out that my prediction might actually become a reality according to this Fortune article here. It's obvious that this move by Adidas is to recoup revenue following the significant losses following West’s antisemitic comments.