Leftover $1B merch prob is Ye-wildering
Adidas still hasn’t figured out what to do with its $1.3 billion stock of unsold Yeezy sneakers after cutting ties with rapper Kanye West over anti-Semitic remarks last year.
CEO Bjorn Gulden outlined the company’s costly dilemma during a call with analysts Wednesday — noting that available options, such as rebranding the sneakers or even literally burning them, all have major downsides.
“Depending on who you speak to, people will say you cannot destroy because it’s a sustainability issue, right? So, please don’t destroy.
“And then, those who are like, ‘Please don’t sell because you have a reputation issue,’ ” Gulden said during the earnings call.
“That’s why we haven’t made a decision on it, because it’s a very complicated issue,” he added.
The Yeezy imprint was one of the most profitable segments of Adidas’ business until last year, when the brand hastily cut ties with West — who has legally changed his name to Ye — following a series of bizarre anti-Semitic tirades.
The German sports apparel giant warned that it will take a whopping $527.5 million hit to its earnings this fiscal year if it does not sell its remaining Yeezy apparel.
The messy breakup with West contributed to a dismal fourth-quarter result for Adidas, which posted a net loss of $540 million.
Gulden said Adidas would face “a lot of reputational risk” if it tries to rebrand and sell the Yeezy merchandise.
“The other side is to say we burn it or we do whatever it takes then to destroy it, and it disappears, then you have another issue,” he added.
The Adidas CEO said he has received “probably 500 different business proposals” from people wanting to resell the Yeezy sneakers.
Gulden did not provide a timetable for a final decision. “I think the goal that we have is to do what the probability is that it damages us the least and we do something good,” he added.