Adidas Plans Sale of Yeezy Merchandise, Proceeds to be Donated

Adidas CEO Bjoern Gulden has announced the intention to sell some of the merchandise from the discontinued Yeezy collaboration with rapper Kanye West, with a portion of the proceeds earmarked for international organizations. The decision comes after Adidas severed ties with West due to his anti-Semitic comments, causing a setback for the sportswear giant.

Adidas has faced challenges in managing the stock of Yeezy brand shoes, valued at 1.2 billion euros ($1.3 billion), which remains in storage since the collaboration ended. The resale market for these shoes has seen a significant surge in value, with certain models more than doubling in price.

During an investor meeting, Gulden addressed the predicament, emphasizing the company’s commitment to selling the merchandise rather than discarding it. The sale is intended to minimize potential losses, estimated at $700 million this year. However, specific details regarding the amount of stock to be sold and the proportion of proceeds to be donated remain unclear.

Gulden highlighted that the donation would benefit international organizations negatively impacted by West’s comments. To preserve the brand’s integrity and avoid a sustainability crisis, Adidas opted against donating the sneakers directly.

Adidas shares rose 2 percent following the announcement, with industry experts praising the decision as a smart and responsible move. The company aims to navigate through the aftermath of the collaboration’s termination, which contributed to Adidas’s first annual loss in 31 years.

While defending Adidas’s past collaboration with West, Gulden acknowledged the rapper’s creative contributions to the industry, despite the challenges posed by his behavior. An internal investigation into alleged misconduct by West found that certain allegations were not substantiated. However, it revealed a challenging work environment influenced by the rapper’s erratic behavior.

Adidas CFO Harm Ohlmeyer stated that the company is implementing measures to prevent such issues in the future. A lawsuit filed by Adidas against West in a German arbitration court is in the early stages, with no determined financial sum.

Despite a decline in first-quarter sales to 5.27 billion euros ($5.75 billion), investors remain optimistic about Gulden’s ability to lead Adidas’s turnaround. The stock has experienced a 65 percent gain since Gulden’s potential succession was first discussed in November. Gulden reassured investors of the company’s commitment to restoring Adidas to its rightful position in the market.

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