Adidas is still unsure what to do with its $1.3 billion mound of unsold Yeezy goods

1. 05. 2023 | Kristýna Bezděková

Six months after severing relations with Kanye West, Adidas is still unsure what to do with its $1.3 billion mound of unsold Yeezy goods. It’s been six months since Adidas broke relations with Kanye West, and the company is still unsure what to do with the avalanche of unsold Yeezy merchandise that followed.

Adidas Bjrn Gulden stated in a statement released accompanied its first-quarter results report on Friday that the loss of its Yeezy alliance is continuing to “hurt” the firm. Sales in North America, Yeezy’s primary market, fell by 20% during the quarter.

After a spate of issues, including multiple antisemitic statements, the corporation severed connections with Ye, formerly known as Kanye West, in October. Adidas has already built a 1.2 billion euro ($1.3 billion) revenue loss into its yearly projections if the shares is not sold. It expects to lose 500 million euros ($552 million) as a result of this.
Gulden, on the other hand, reaffirmed comments expressed on Adidas’ fourth-quarter results call in March on Friday, namely that the company still has no plan of action in place to address the issue.

During the March results call, HSBC analyst Erwan Rambourg asked Gulden about Adidas’ quandary. “You can’t sell Yeezy for fear of jeopardising your reputation.” At the same time, you cannot destroy the product for the sake of the earth. So, I’m simply curious what alternatives you have?” Rambourg stated this. Gulden quickly admitted that he didn’t know the answer.
“We could sell the product for a loss…” We could sell it with a tiny profit margin and donate the difference… “Our goal is to do what has the least chance of harming us while also doing something good,” he explained.

He informed analysts that he has received roughly 500 different business offers from persons interested in purchasing the shares. “However, that is not always the best thing to do,” he added. According to experts, one way around this may be to deface these items before donation in order to reduce their resale value, albeit this would cost Adidas more.”This looks like a no-win situation for Adidas, and a reminder of mama’s caution to be careful who you associate with,” Dion Kenney, COO of e-commerce platform Mondofora, said in a RetailWire discussion post.

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Author of this article

Kristýna Bezděková

Kristýna is a student of marketing and communication in an undergraduate program. She writes and translates content into the Czech language


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