Adidas has, recently announced that it will sell off its inventory of Yeezy sneakers made in conjunction with African-American musician and business magnate Kanye West rather than destroy them after breaking relations with him for antisemitic remarks.
Adidas CEO Bjorn Gulden said that the business has an inventory of 500 million Yeezy sneakers worth more than $1 billion, which it plans to gradually sell off.
He added that the company intends to contribute a portion of the earnings to charities impacted by Kanye West’s divisive remarks.
He did not, however, say which charities would get the money.
“We have inventories of 500 million shoes with a selling value of more than $1 billion, and burning the shoes cannot be the solution,” Gulden 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.”
Adidas chose to sever ties with rapper Kanye West following his antisemitic comments, which the company claimed violated the business’s basic principles of equality, inclusion, and diversity.
Since ending his collaboration with Adidas, West, who is now referred to as Ye, has seen his net worth drop significantly by $1.6 billion, but the sportswear giant has also suffered.
Adidas recorded a net loss of $43 million in the first quarter of its 2023 fiscal year as opposed to a profit of $531.2 million in the same time previous year.
Due to lost revenue from ending the manufacture and sale of its Yeezy line, operating profit also decreased by more than 85% to $66.2 million.
Sales in the reported quarter were negatively impacted by the fallout from West’s brand by around $441.56 million, which had an effect on revenue in the areas of North America, Greater China, and EMEA.
Gulden, who is still upbeat about the company’s prospects, says that 2023 will be a “transition year” for the brand. He revealed that Adidas will concentrate on lowering inventory and decreasing discounts as part of their aim to achieve profitability by 2024.
