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Adidas will continue to sell Kanye West’s shoe designs without the Yeezy name

By Nathaniel Meyersohn, CNN Business

Adidas ended its sneaker partnership with Ye, formerly known as Kanye West, last month after the musician’s anti-Semitic tirade. But Adidas will continue to sell the lucrative sneaker and apparel line, stripped of the Yeezy name and branding.

The company said it’s the sole owner of all Yeezy line design rights for both existing and future colors and versions. Selling the sneakers under Adidas’ own branding will save the company about $300 million in royalty payments and marketing fees.

“Going forward, we will leverage the existing inventory with the exact plans being developed as we speak,” Adidas finance chief said Wednesday Harm Ohlmeyer.

The Yeezy line was a key product for Adidas and the fallout has hurt the company.

Yeezy products generated nearly $2 billion in sales last year for Adidas accounting for 8% of the company’s total sales, according to Morgan Stanley. The line also helped Adidas get shelf space at major retailers and brought new customers into the stores who purchased other Adidas merchandise.

Ending the partnership cost Adidas more than $250 million in profit and $500 million in lost revenue, the company said Wednesday.

On Tuesday, Adidas said it was appointing a new CEO, tapping the head of Puma to succeed outgoing CEO Kasper Rorsted.

Norwegian Bjørn Gulden, 57, will become CEO of Adidas next year. He will have to find ways to replace Yeezy sales and turn around the brand. Adidas’ stock has dropped around 80% the last two years.

It would be a mistake for Adidas to continue selling the line, said Darcey Jupp, an apparel analyst at GlobalData.

“It should refrain from relaunching items under its own brand, as they will always be synonymous with West, and this would likely result in muted customer demand,” he said in a note to clients.

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