Adidas has said it will not destroy the unsold merchandise from its defunct Yeezy partnership with Kanye West and will instead try to sell the stock and donate some money to those harmed by the rapper’s comments.
The German sportswear brand has been faced with a problematic pile of millions of pairs of Yeezy shoes since last October when it cut ties with West, who changed his name to Ye in 2021, over antisemitic comments on social media.
The stock with a value of €1.2bn (£1bn) has been sitting in storage since being withdrawn from sale and the debacle contributed to Adidas’s first annual loss in 31 years.
On Thursday, Bjørn Gulden, the company’s chief executive, told investors at the group’s annual shareholder meeting in Germany that destroying the goods was not the right move and the company was working on a plan for them to be sold.
He said some of the proceeds would then go to unnamed charities that represented people who “were hurt” by the comment’s made by Ye.
“Burning the goods is not the solution … What we are trying to do now over time is to sell parts of this merchandise and donate money to the organisations [that were] hurt by Kanye’s statements,” Gulden said. “When we will do that and how we will do that is not clear yet, but we are working on those things.”
He defended the initial decision to collaborate with the rapper, saying: “As difficult as he was, he is perhaps the most creative mind in our industry.”
By selling some of the stock, the company could mitigate a potential €500m hit to operating profits as a result of ditching Yeezy. Adidas has said that if it decides not to “repurpose” the Yeezy stock, the company would fall to a €700m loss from the writeoff of the value of footwear plus other one-off costs.
It is unclear how much stock will be sold under the current plan and what proportion of the proceeds will be donated.
Ed Stoner, a sportswear industry consultant who previously worked at Adidas, said the decision to sell the footwear and give the proceeds away was “a smart and responsible move”, adding: “It not only preserves the brand’s integrity but avoids a sustainability crisis.”
However, if the goods are sold, Ye will be entitled to previously agreed commissions of 15% of turnover, according to media reports. Adidas has declined to comment on this aspect.
Analysts had suggested Adidas could relaunch the popular Yeezy products under a different brand name. The brand has said it is the sole owner of all design rights to existing products as well as previous and new colour variations under the Yeezy partnership.
