Months after cutting ties with Kanye West over antisemitic comments, sportswear giant Adidas has announced that it will sell off its inventory of Yeezy shoes made in collaboration with the African-American rapper-turned-business mogul rather than burn them.
Adidas CEO Bjorn Gulden confirmed that the company holds an inventory of 500 million Yeezy shoes worth over $1 billion and intends to sell them off gradually.
He also revealed that the company plans to donate some of the proceeds to organizations affected by Kanye West’s controversial statements.
However, Gulden did not disclose which organizations would be receiving the funds.
“We have inventories of 500 million shoes with a selling value of more than $1 billion, and burning the shoes cannot be the solution,” he said. “What we are trying to do over time is to sell parts of these goods and then donate to organizations that help us and have also been hurt by Kanye’s statements.”
The decision to sever ties with West came after the rapper made antisemitic comments that violated Adidas’ core values of diversity, inclusion, and equality.
While West, now officially known as Ye, has suffered a significant $1.6-billion decline in net worth since the termination of his partnership with Adidas, the sportswear behemoth has also taken a hit.
In the first quarter of its 2023 fiscal year, Adidas reported a net loss of €39 million ($43 million) compared to a profit of €482 million ($531.2 million) in the same period last year.
Operating profit also fell by more than 85 percent to €60 million ($66.2 million) due to lost earnings from discontinuing the production and sale of its Yeezy line.
The fallout with West’s brand hit sales in the reported quarter by around €400 million ($441.56 million), impacting revenue across North America, Greater China, and EMEA regions.
However, Gulden remains optimistic about the company’s future, revealing that 2023 will be a “transition year” for the brand. As part of its efforts to regain profitability by 2024, Gulden disclosed that Adidas would focus on reducing inventories and minimizing discounts.
