Warehouses operated by Adidas AG are stuffed with a market value of more than $1 billion of unsold Yeezy products. Top executives have been mulling over what to do with all those Yeezy shoes since it terminated its contract with Kanye West last October.
Adidas’ new CEO Bjorn Gulden offered new insight Thursday at an annual shareholder meeting of what he plans to do with the shoes.
“Burning is not the solution,” Gulden said. He said over time, the German sportswear maker will “try to sell parts of the product” and donate the profit to charities of people who “were hurt” by West’s antisemitic comments last year.
Adidas previously warned that if it were to dispose of the remaining inventory of Yeezy shoes — it would suffer an operating loss of as much as €700 million ($765 million) in 2023. This would mark the company’s first loss in three decades.
Gulden did not specify potential buyers for the Yeezy shoes or identify the charitable organizations that would benefit from the sales proceeds. He added decision over what to do with the unsold product is “unbelievably complicated.”
West has caused great pain for Adidas since his shoe brand contributed an estimated $1.8 billion in annual revenue for the company or about 7% of total revenue. And why Addidas execs decide to bet a large chunk of revenue on Yeezy is beyond our understanding.
Shares of Adidas trading in Germany have plunged in recent years.
Earlier this week, a top Adidas shareholder demanded the company release an internal investigation over West’s inappropriate behavior. A class action lawsuit was recently filed against the company, alleging execs knew about the potential harm of Ye’s reckless “personal behavior” but failed to warn investors.
Tyler Durden
Fri, 05/12/2023 – 07:45
