Adidas Still Hasn’t Figured Out What to Do With All Those Yeezy Shoes
Adidas still hasn’t figured out what it’s going to do with the $1.3 billion of unsold Yeezy stock it yanked after terminating its partnership with Kanye West over his string of antisemitic rants last year.
As The Associated Press reports, new Adidas CEO Bjorn Gulden addressed the issue in a conference call Friday, May 5, saying that are “getting closer and closer to making a decision” and the “options are narrowing.”
Many of the options Adidas is weighing, however, are imperfect. As Gulden previously outlined, selling the shoes outright would mean paying royalties to West; they don’t want to remove any Yeezy branding and then sell the shoes, because that would be dishonest; and giving the shoes away would likely lead to a swath of resales on secondary markets. There is, of course, the option of just destroying everything, a choice Gulden declined to say was off the table, though he did stress Adidas was “trying to avoid that.”
It’s also unclear exactly how many pairs of Yeezy shoes Adidas still has. Gulden declined to provide a number “because then the consumer would know how many we have and that could have an impact on demand.”
The Yeezy split has been financially brutal for both Adidas and West, with Gulden admitting in a statement that it is “of course hurting us.” Adidas reported hundreds of millions in lost sales since ending the partnership, and the split could dent earnings by about $549 million in 2023 if the company doesn’t sell the shoes.
And as for West — most recently seen linking up with yet another fringe far-right figure — after the relationship was terminated, there were estimates that it could cost him about $1.5 billion in net worth, likely ending his deeply-cherished “billionaire” status.
Last year, not long after the Yeezy/Adidas partnership ended, Rolling Stone reported extensively on the toxic workplace culture inside the shoe company. One employee reported hearing West say that “skinheads and Nazis were his greatest inspiration, while a former senior Adidas exec added that they’d heard comments such comments from West before.
Meanwhile, Adidas is also now facing a class action lawsuit from shareholders accusing it of failing to minimize the fallout over the terminated partnership. The lawsuit, filed in Oregon last Friday, claims Adidas knew as far back as 2018 (when West made his infamous slavery “sounds like a choice” remark) that West’s controversial comments could impact the company’s stock price; but, the suit alleges, Adidas continued to work with the rapper until his antisemitic rants made that relationship untenable.
The lawsuit also claimed Adidas “ignored the risks of oversupply of Yeezy branded shoes in the event that the Partnership were to suddenly end, and in particular, if demand for the shoes were to fall due to any controversy surrounding West.”
Adidas responded to the lawsuit saying, “We outright reject these unfounded claims.”
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