How Will Adidas Get Rid of $1.3 Billion Worth of Yeezys After Kanye West Split?
According to a Chicago Sun-Times report, published on Wednesday (March 8), Adidas is still trying to figure out how to discard $1.3 billion worth of Yeezy sneakers. At an earnings call on Wednesday, Adidas CEO Bjorn Gulden said selling the popular kicks would mean they would have to pay royalties to Ye, who was dropped by the German sportswear company five months ago following his anti-semitic remarks on social media and interviews.
Gulden was presented with several options. He said some companies offered recycling solutions, but destroying the sneakers could "raise sustainability issues," the CEO said. As for restitching them to cover up the Yeezy name, Gulden frowned at that idea, stating that it's "not very honest, so it's not an option."
A recommendation to donate Yeezys to people in need, like the victims of the Syrian earthquake and other poor countries, seems to be an ineffective idea because the goods would "come back very quickly" in the resale market. "So that's not really an option," Gulden said.
Despite the suggestions, Adidas' CEO promised that if they do sell the remaining Yeezy sneakers, any profits will be donated to different charity organizations.
"I can promise you that the people that have been hurt by this will also get something good out of it and get donations and proceeds in different ways, shapes or forms," Gulden said.
Adidas dissolved their partnership with Kanye West back in October of 2022. In February of 2023, sportswear company and Ye reached an agreement to sell all remaining $500 million worth of Yeezy sneakers in 2023. Adidas is reportedly expecting to take a $1.3 billion financial hit as a result.
During the earnings call, Gulden called 2023 "a transition year," saying "we can then start to build a profitable business again in 2024."
According to the Chicago newspaper, Gulden also added that Adidas is still investigating former employees' allegations that Ye created a toxic work environment and that the front office was aware of his unprofessional behavior and failed to protect workers.