Georgia Shoemaker Lays Off Most Of Staff After Adidas Halts Yeezy Production

Okabashi, Adidas’ manufacturing partner and family-owned shoe company in Buford, Georgia, has cut 142 jobs as Adidas ends its partnership with Ye (formerly Kanye West).

“As of now, there are not enough orders to keep all employees busy. It is with great regret that Okabashi announces the immediate layoff of 142 employees,” the statement said.

That equates to two-thirds of the company’s workforce, a company spokesperson told CNN on Friday.

Adidas (ADDDF) cut ties with the musician after its notorious anti-Semitic tirade last month. The sportswear maker said it “does not tolerate anti-Semitism and any other type of hate speech” and said his recent comments were “unacceptable, hateful and dangerous.”

Sales and production of Yeezy-branded products and payments to Yeezy and his company have ceased.

“Adidas clearly has no tolerance for hate speech, and Okabashi represents those values,” the statement said. “Unfortunately, this means that Okabashi has to discontinue products currently being produced for Adidas,” the company said.

Okabashi has been a U.S. footwear contract manufacturing partner for Adidas Yeezy products since April 2020, the company said in a statement to CNN.

The company “is coordinating with local government agencies and manufacturers to provide support and alternative employment opportunities for affected team members,” it said.

The shoe maker said that “employees who are laid off will receive severance packages and expanded health insurance coverage.”

As one of the remaining 1% of U.S. footwear manufacturers, Okabashi will continue to manufacture private label products and is pursuing other partnership opportunities,” the statement said.

Sandals made by Okabashi, which has been in operation since 1984, are “made from approximately 25 percent recycled materials,” according to its company website.

The choice of dealing with unsold Yeezy gear presents a huge challenge.

Destruction or disposal of unsold merchandise has an environmental impact. Manufacturing clothing and other garments already has a high environmental cost due to greenhouse gas emissions, large amounts of water use, water pollution and textile waste. Typical methods of destroying unwanted clothing – such as using an incinerator – only compound the problem.

Renaming items to cover up disputes is another common industry tactic, experts say. It involves removing the logo of a bad brand, or disguising it in some way.

The style and design of Yeezy products are so unique that renaming them may not work, said Burt Flickinger, a retail expert and managing director at retail consultancy Strategic Resources Group.

The most likely destination for unwanted Yeezy products may be overseas markets, which are often solutions to problem commodities. Shipping to countries in need and where product durability is more important than brand or fashion is often an industry fallback.