Adidas has revealed its intentions to sell a portion of the inventory from its terminated Yeezy collaboration with rapper Kanye West, and donate some of the proceeds to international organizations. This decision comes after Adidas severed ties with West due to his antisemitic remarks in late 2021, which resulted in millions of unsold Yeezy sneakers, valued at €1.2 billion ($1.3 billion), being stored away. The situation has taken a toll on the company’s stock and bottom line.
The value of these Yeezy sneakers in the resale market has soared since Adidas ceased production, with certain models more than doubling in price. Adidas CEO Bjoern Gulden stated during an investor meeting in Fuerth, Germany that the company is still determining the details of the sale process. He emphasized that destroying the merchandise would not be a viable solution and that the proceeds would benefit international organizations affected by West’s comments.
By selling some of the inventory, Adidas may reduce its potential $700 million loss for the year. However, the exact amount of stock to be sold and the percentage of proceeds to be donated remain unclear. West, who changed his name to Ye in 2021, will be entitled to previously agreed-upon commissions if the merchandise is sold.
Gulden defended the collaboration with West, describing him as “perhaps the most creative mind in our industry.” Additionally, Adidas CFO Harm Ohlmeyer stated that an internal investigation into alleged misconduct by West, including antisemitic remarks and harassment of female employees, did not substantiate the allegations. However, the investigation acknowledged the challenging work environment created by West’s erratic behavior, and the company is taking measures to prevent such issues in the future.
Adidas is currently in the early stages of a lawsuit in a German arbitration court, seeking damages from West. As the sportswear giant works to overcome this debacle, investors remain hopeful that CEO Gulden can turn the company’s fortunes around.
