Adidas will sell through its $1.3 billion dollar stock of unsold Yeezy shoes after all. Here’s the latest.
Adidas’ new CEO Bjørn Gulden says the company will sell through its stock of the shoes and donate the proceeds to charity. Gulden previously told shareholders that the company spent months deliberating on what to do with its unsold merchandise following its acrimonious split with the rapper in October 2022 following the latter’s string of antisemitic comments.
“What we are trying to do no over time is to sell parts of this inventory and donate money to the organizations that are helping us and that were also hurt by Kanye’s statements,”Gulden says of the move. Previously the CEO warned the company was wary of creating a black market for unsold Yeezy merchandise—since no more will be made.
While Adidas will be donating a portion of the sales to charity, their business arrangement with the rapper still stands. He will be entitled to 15% of all sales, which is one reason why Adidas considered destroying the unsold merchandise.
Adidas originally planned to rebrand the shoes and sell them without the Yeezy branding, cutting out the 15% it would owe the rapper. In a statement made in October 2022, Adidas said it is the “sole owner of all design rights registered to existing product. We intend to make use of these rights as early as 2023.”
Adidas’ Q4 2022 losses were around $1.3 billion, with much of that connected to the loss of Yeezy revenue. In the last two fiscal quarters, loss of Yeezy sales has amounted to an additional $441 million lost. Gulden’s Adidas has made the decision to sell the product regardless of the reputational risk just to wipe its hands of the issue and start with a clean slate.
Music celebrity partnerships haven’t worked out so well for the sports company. Aside from its disastrous Yeezy lineup, it also cancelled its collaboration with Beyonce’s Ivy Park clothing line. Instead, Adidas says it will focus on marketing with sports celebs.