Adidas will eventually sell its $1.3 billion inventory of unsold Yeezy shoes. Here’s the latest.
Adidas’ new CEO Bjørn Gulden says the company will sell its stock of shoes and donate the proceeds to charity. Gulden previously told shareholders that following the acrimonious split with the rapper in October 2022 after he made a series of anti-Semitic comments, the company spent months pondering what to do with his unsold merchandise.
“What we don’t want to do over time is sell portions of this inventory and donate money to the organizations that help us that have also been hurt by Kanye’s statements,” Gulden says of the move. Earlier, the CEO warned that the company was reluctant to create a black market for unsold Yeezy products because no more products would be made.
While Adidas will donate a portion of sales to charity, the business deal with the rapper will remain in place. He is entitled to 15% of all sales, which is why Adidas considered destroying the unsold merchandise.
Adidas originally planned to rebrand the shoes and sell them without the Yeezy branding, saving the 15% the company would owe the rapper. In an October 2022 statement, Adidas said it “is the sole owner of all design rights registered to existing products.” We want to make use of these rights as early as 2023.”
Adidas’ fourth-quarter 2022 losses totaled around $1.3 billion, with much of that related to Yeezy’s loss of revenue. In the last two fiscal quarters, Yeezy lost another $441 million in revenue. Guldens Adidas made the decision to sell the product regardless of the reputational risk, only to solve the problem and start over.
Partnerships with music celebrities haven’t worked out so well for the sports company. Aside from the disastrous Yeezy series, Beyonce’s Ivy Park clothing line collaboration has also been canceled. Adidas wants to focus on marketing with sports stars instead, Adidas says.