Adidas CEO Bjørn Gulden — who has been wrestling for months over what to do with the company’s piled-up Yeezy inventory — suggested on Thursday that it might be sold.
Since breaking ties with rapper Ye, formerly known as Kanye West, in October over his anti-Semitic outbursts and public meltdowns, Adidas’s once-popular Yeezy shoes have been piling up in warehouses.
While Adidas has been slow to decide what to do with the millions of sneakers, Gulden clarified that “burning is not the solution” at Thursday’s annual shareholder meeting, according to Bloomberg.
He added that Adidas has spoken to many nonprofit organizations that agreed with the decision. Gulden had previously said during a March earnings call that he was “trying to avoid” burning the shoes “because it’s a sustainability issue.”
Instead, “what we are trying to do over time is to sell parts of these goods and then donate to organizations that help us and that also have been hurt by Kanye’s statements,” Gulden said, according to Bloomberg.
“It’s not yet clear when we will do that and how we will do that, but we’re working on these things,” the CEO said. He also didn’t clarify which organizations Adidas was looking to donate to.
Adidas had also said in March that he didn’t want to sell off the unsold Yeezy inventory to avoid “a reputation issue.”
In a 2022 annual report reviewed at the shareholders meeting, Adidas said that should it “decide not to repurpose any of the existing Yeezy product, this would result in the write-off of the existing Yeezy inventory and would lower the operating profit by an additional around €500 million ($546.5 million) this year.”
Seven months after Adidas and Ye’s breakup, Gulden still hasn’t made a conclusive decision about what to do with the sneakers, and the unsold inventory has piled up in warehouses.
The German sportswear company is looking at $1.3 billion worth of unsold Yeezy show inventory. And although the brand is reluctant to resell the products, a resale could recover the $546.5 million in losses the brand is facing.
Gulden said the breakup continues “hurting” the brand in its Q1 earning report released last week.
The report revealed that Adidas saw a “20% sales decline in North America — down 5% excluding Yeezy,” which Adidas blamed, in part, on “the high levels of inventory.”
Gulden said last week that “2023 will be a bumpy year wit disappointing numbers” for Adidas. He added that this will be “a transition year to build a strong base for a better 2024 and a good 2025 and beyond” rather than “maximizing our short-term financial results.”
[Written in collaboration with other media outlets with information from the following sources]
