Not So Yeezy

In this buzz: Adidas, Ye (Kayne West) and Yeezy gear; Again Powell and more…

Yesterday, Adidas…
… announced its first annual loss in 31 years after cancelling its collaboration with Ye, the artist formerly known as Kayne West for his antisemitic comments. The loss of $760 million and slashing of its dividend was expected but it is a reminder of how fortunes can quickly change.

CEO BJørn Guiden cautioned investors to dampen their expectations for 2023, which he referred to as a “transition year.” Currently, Adidas is facing two big problems.
① How to replace the $1.5 billion from its Ye collaboration and
② how to get rid of $1.3 billion of Yeezy gear.
The problems with the massive inventory include that fact that even if Adidas goes through the trouble of rebranding and selling the items, Ye is still owed a cut of the profits and that not a good look.

The most likely scenario:
If Adidas were to simply donate the shoes, that could potentially create a huge resale market. Guiden hinted that the most likely scenario would be to ✳ sell the apparel and ✳donate the proceeds to charity, indicating that Adidas wants some good to result from Ye’s hurtful actions.

In other news,
…stocks were down again yesterday even as Powell baby-stepped some of his Tuesday comments before Congress back during his second day of testimony. Read, “hey, we haven’t made up our mind yet on where rates are going!”

❗ Fool me once said stocks as investors await tomorrow’s February payroll data.