Adidas moves forward to sell Yeezy shoes sans Ye

Adidas is set to sell Yeezy designs with its own branding, after cutting ties with the rapper amid anti-Semitic backlash.

According to Bloomberg, the multi-billion brand management said it's the "sole owner" of the design rights. At the same time, it is moving to make all Yeezy products under the Adidas label.

"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 German company set to sell Yeezy designs under the logo of Adidas next year.

"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."

Previously, 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.

The agreement with Yeezy by Adidas was inked to end in 2026. Moreover, Adidas' move to sever ties to Ye may hit the brand earning $247 million this year. In the midst, Adidas shares fell 3.2% at the closing of German trading.

"We would expect to see further revenue, margin, and earnings consensus downgrades following this latest installment of bad news at Adidas," RBC's Dadhania said. "We are doubtful whether Adidas will be able to fully compensate for the loss of Yeezy profits in 2023, which is likely to weigh on sentiment further in our view."