Adidas has a messy, overflowing closet these days.

After severing ties with the controversial rapper Ye (better known as Kanye West), the world’s second-biggest sports apparel brand has ~$750m worth of Yeezy-branded inventory it may never sell, setting up a rough year for the company.

Adidas anticipates a percentage drop in sales in the high single digits compared to last year — a total that could reach ~$2B, according to Business Insider.

Ye was a huge earner for the company

His Yeezys, which retail for $200+, were among the hottest shoes in the world, earning Adidas $1B+ annually in recent years.

But he’s not Adidas’ only problem. Its strategy over the last few years has centered on partnerships with other artists — like Bad Bunny, Pharell Williams, and Beyoncé — that haven’t always met financial expectations.

Bey’s Ivy Park clothing brand (a collaboration with Adidas) has struggled in recent times, per The Wall Street Journal:

• 2021 revenue was ~$93m
• 2022 revenue was ~$40m (vs. $250m projected)
• 2023 revenue is projected to be $65m — a far cry from an earlier target of $335m

What’s the next big thing in the shoe industry?

As one analyst explained, Adidas has struggled to find it, and newer rivals like Hoka One One and On may capitalize.

• Hoka, owned by parent company Deckers, reported a YoY sales increase of ~91%.
• On experienced a 50% YoY sales increase.

BTW: Adidas hired CEO Bjørn Gulden away from Puma last year, continuing a bitter rivalry that dates back to the founding of the companies by the Dassler brothers.

A new survey of 3k consumers from Realtor.com has shed some light on the impact housing costs have on relationship decisions.

Among baby boomers, 44% of respondents said money and logistics were factors when considering moving in with a romantic partner. In comparison, 80% of Gen Z respondents said the same.

• Gen Z respondents were also more likely to sign a pre-move contract with their partner detailing what would happen in the event of a breakup, with 54% of the group admittedly doing so.

Seventy percent of all respondents said moving in with a partner saved them money.

• 27% said the move saved them $1-$500.
• 20% said it saved them $501-$1k.
• 13% said it saved them $1k-$2k.

Somewhat unsurprisingly, the survey also found 42% of respondents who had moved in with romantic partners regretted it, with 17% saying they broke up soon after.

Wash trading is when someone sells something to themselves to inflate demand or make it look like there’s more activity in a marketplace.

NPR’s Wailin Wong offered this example: You buy several copies of your self-published novel to make it seem popular. Because you spent the money you earned, it’s “a wash.”

In the 1930s, traders used wash trading to manipulate the market and short stocks. In 1936, the US passed a law making it illegal.

It’s since come to crypto

A 2022 Forbes report that analyzed 157 crypto exchanges found that 51% of trading was fake.

In a working paper, the National Bureau of Economic Research suggests wash trading accounts for up to 70% of trades on non-compliant exchanges (which don’t perform Know Your Client (KYC) identity verification), per Business Insider.

While some of it may be unintentional, it could also be investors pumping prices or crypto exchanges trying to entice investors.

Who’s doing something about it?

That’s surprisingly tricky. Securities, like stocks and bonds, fall within the SEC’s jurisdiction; commodities, like gold and oil, are regulated by the CFTC. No one’s decided what cryptocurrency and NFTs are.

“Until the government decides how to classify crypto assets, it’s hard for regulators to police the way they’re traded,” Wong explained.

But exchanges can step in. Wash trading is prohibited on Binance, which last month announced a new opt-in Self-Trading Prevention feature to prevent unintentional wash trading.

BTW: There’s also something called a “wash sale,” which can cost you big-time if you’re not careful.