Adidas have been left over with €1 billion worth of Yeezy apparel from their partnership with Kanye West. Anti-semitic comments from the rapper have promoted the brand to end their association with him.
They believe it is the right thing to do even though the situation is unfortunate. However, the problem they now face is what to do with the leftover stock. One of the options that came up was to literally burn the stock. But that has seemingly been ruled out by Bjorn Gulden, the chief executive of the company.
Adidas pondering what to do with leftover Yeezy stock
“The inventory is there, it’s not running away,” Gulden said. “We should not do a decision just to please someone. We should do a decision when the consequences of that decision are the most positive that we can do.”
He added: “There are so many people that have an interest in this from different communities from around the world,” he added. “I’ve only been involved in this for seven weeks, and I don’t feel qualified to make a decision based on the facts I have.” (He was appointed in November, and took over his new role in January.)
As per the contract that the two parties had, Adidas will have to pay Kanye West if they decide to sell the Yeezys. They are looking into ways to repurpose the products at 15-30%.
The contract cancellation cost Adidas €600 million in the last few months of 2022, and they project profits to dip by €500 million this year. One of the options being considered include selling them at a lower amount and donating the profits to charity.
That is because giving away the products for free is complicated owing to the surge in resale value.