What is the Future of adidas?

In the last few months, our social feeds, news headlines and conversations have been surrounding the ongoing developments of Kanye West. On the 25th of October, adidas abruptly ended the deal, closing the accounts on what was one of the biggest partnerships in history. 

After controversially breaking his deal with Nike, West signed along the dotted line with adidas in 2013. Following the confirmation, they released their first collection almost two years later in 2015 at New York Fashion Week. What ensued since the debut will, for better or worse, remain in history as one of the greatest sneaker lineages of all time. The fact this is the case made the abrupt termination of the deal a bitter-sweet pill to swallow with many people calling it an end of an era.

In recent interviews, West has been quoted as saying “adidas could never drop me”. Despite the Three Stripes, amongst many other outlets, doing just that, there were questions as to what the future of adidas would look like post-YEEZY. 

At the time of writing, we are yet to hear any official news from adidas regarding how they wish to proceed with YEEZY with current reports stating that production and releases of all product moving forward has been halted, with several stores being asked to return their stock. 

Regardless of the future of Kanye West and YEEZY, the pertinent question is: What is the future of adidas? 

To explore the question, there are a few different factors at play that will ultimately inform what we can expect to see from one of the longest-standing sportswear brands in history. 

The first point is of course money. YEEZY was valued at around $3.2-$4.7 billion by UBS Group in 2021 as a standalone company, accounting for roughly $1-$2 billion in annual sales for adidas, according to Evercore. 

adidas was also cited as stating “This is expected to have a short-term negative impact of up to €250 million on the company’s net income in 2022 given the high seasonality of the fourth quarter”. This sentiment can also be seen looking at the price of their stock value which was around 64 Euros in February 2015 when the first YEEZY show was unveiled. By the latter half of the year, their stocks had already begun to increase, sitting at just over 90 Euros in December 2015.

By January 2020, this value had skyrocketed to 313 Euros, the second highest in the company's history after it hit 316 Euros in July 2021. However, looking at the last month, there has been a largely downward trend with the share value dropping by 23% bringing the price down to the lowest it’s been since 2014. With this in mind, adidas need to fill the gap in their business, and in the market, that the termination of the YEEZY partnership has left behind. 

Looking back at previous releases from adidas, it could suggest that they were already gearing up towards having the deal cancelled after they released designs closely depicting the YEEZY Slide and the Foam Runner.

A more farfetched rumour is that adidas will continue to sell YEEZY products without the branding attached, as reported by Bloomberg, whether this means that they will proceed with original designs or the newer ones they have begun to create that reference their predecessors is yet to be seen.

However, the thought of adidas releasing a product which consumers know as YEEZY silhouettes, may not be as farfetched as you’d think. On the 25th of October, the day adidas officially announced that it was terminating their deal in a statement, an Instagram account named Sneaker Legal released images of what are supposedly official patents of YEEZY designs that adidas have ownership of. These patents include the YEEZY Boost 750, YEEZY Boost 350, YEEZY Boost 350 V2, YEEZY Boost 700 V2, YEEZY 700 V3, and the yet-to-be-released YEEZY 1050. 

These patents confirm not only that Kanye West will not have the ability to release any previous designs under YEEZY as a single entity, but also suggest that adidas could if they chose to do so, re-release silhouettes with different colourways or tweaks that set them apart from prior pairs. 

The next question is: Who will take over the mantle at adidas? They have a strong roster of designers including Pharrell Williams, who has continued to push his boundaries in addition to some of adidas’ best models including the NMD, Wales Bonner who is best known for her recent work on the adidas Samba and Sean Wotherspoon with his ongoing Super Earth collection. Additionally, at the end of 2020, Adi signed a deal with Fear of God founder, Jerry Lorenzo. 

As with West, Lorenzo arrived at the Three Stripes from the Swoosh. However, the duo are yet to release any products despite teasing a minimal hoodie designed in January. With the closure of YEEZY, this could be the optimal time for Jerry to unveil his plans for their ‘long-term’ deal. With the busiest time of the year effectively upon us, it would certainly be in both adidas’ and Jerry Lorenzo’s interest to strike while the iron’s still hot.

Over anything else, adidas has and will continue to live as its own entity. After being founded in 1949, they have been one of the most prolific sportswear brands for many generations. If anything, the recent changes could benefit them with the current audience of sneakerheads knowing adidas through a YEEZY lens. However, this opportunity provides adidas with a chance to reinvigorate its classic models, giving a new generation of sneakerheads an understanding of the brand at its core - something that feels like is lost and underappreciated in recent years. 

As mentioned earlier, the details on what’s to come concerning the future of adidas is yet to be confirmed with the recent changes still incredibly fresh. While we have some ideas and hints of what to expect, there are still several questions yet to be answered: What will happen to the staff that worked for YEEZY?, Will the YEEZY product yet to be sold be destroyed or sold somehow?, Ultimately, how will this termination affect adidas?

As well as their recent collaborations with Prada, Gucci and Balenciaga (with the infamous Triple S set to arrive soon) 2023 is set to be an incredibly interesting time for adidas as well as sneakers in general, with one of the biggest pillars in the market being removed. 

For the latest updates on adidas and YEEZY, stay tuned in with Kick Game.