The proceeds from Adidas’ unsold Yeezy shoe stock will be donated to charity, as announced by the company. This decision comes after the company cut ties with Kanye West in October 2022 due to his antisemitic remarks.[0] Adidas plans to sell its stock of unsold Yeezy shoes and donate the proceeds to charity, CEO Bjorn Gulden said Thursday. Adidas predicted that their choice to refrain from selling the current Yeezy merchandise would result in a decrease of approximately $1.28 billion in their annual revenue and a $533 million reduction in operating profit. This estimation was made in February. Adidas lost almost $440 million in sales during the first quarter solely due to the termination of their Yeezy line.
The decision to sell the remaining Yeezy stock comes after months of deliberation on what to do with the unsold shoes, with options including destroying them. However, Adidas ultimately decided against destroying the merchandise due to sustainability concerns.[1] Instead, the company plans to sell parts of the inventory and donate the proceeds to organizations representing people who were hurt by Kanye West’s comments.
The Yeezy partnership between Adidas and Kanye West was one of the company’s most successful, generating close to 10 percent of its annual revenue.[2] However, after West’s antisemitic remarks, Adidas cut ties with him, leaving the company with over $1 billion of Yeezy stock.[3] The discontinuation of the Yeezy business has caused Adidas to incur significant losses, with the decision to not sell the existing Yeezy merchandise estimated to cut the company’s full-year revenue by $1.3 billion and its operating profit by $533 million.
Adidas has also faced a class-action lawsuit from investors who claim that the company knew about West’s problematic behavior years before cutting ties with him.[4] The lawsuit alleges that Adidas failed to address West’s extreme behavior, which hurt the company’s reputation.
Adidas CEO Bjorn Gulden has acknowledged that West is a difficult person to work with but called him the most creative person in the industry.[5] Despite the controversy surrounding West, Yeezy shoes have become some of the most collectible in the world since Adidas first partnered with him in 2016.
In conclusion, Adidas’ decision to sell its remaining Yeezy stock and donate the proceeds to charity is a significant move in response to the controversy surrounding Kanye West’s antisemitic remarks.[6] The company has faced significant losses since cutting ties with West, and the decision to sell the remaining inventory is a step towards mitigating those losses. By donating the proceeds to organizations that were hurt by West’s comments, Adidas is also taking responsibility for its association with the controversial artist.
0. “Adidas Is Selling All Yeezy Inventory and Donating the Proceeds to Charity – RELEVANT” RELEVANT Magazine, 12 May. 2023, https://relevantmagazine.com/culture/adidas-is-selling-all-yeezy-inventory-and-donating-the-proceeds-to-charity
1. “Adidas Plans to Resell Remaining Yeezy Sneakers” Hollywood Reporter, 11 May. 2023, https://www.hollywoodreporter.com/lifestyle/lifestyle-news/adidas-plans-resell-remaining-yeezy-sneakers-1235485535
2. “Adidas sparks gold rush with £870m sale of Kanye West’s Yeezy shoes” The Telegraph, 11 May. 2023, https://www.telegraph.co.uk/business/2023/05/11/adidas-yeezy-kanye-west-shoe-sales/
3. “adidas Finally Has a Plan to Sell Its Remaining YEEZY Sneaker Stock” Highsnobiety, 11 May. 2023, https://www.highsnobiety.com/p/adidas-yeezy-sale-charity/
4. “Kanye West Yeezy loss is hurting us, admits Adidas” BBC, 5 May. 2023, https://www.bbc.com/news/business-65492142
5. “Adidas to Sell Yeezy Stockpile, Donate Proceeds to Charity” Entrepreneur, 12 May. 2023, https://www.entrepreneur.com/business-news/adidas-to-sell-yeezy-stockpile-donate-proceeds-to-charity/452078
6. “Adidas Opts to Sell Yeezy Sneakers, Donate Proceeds” Front Office Sports, 11 May. 2023, https://frontofficesports.com/adidas-opts-to-sell-yeezy-sneakers-donate-proceeds/