Adidas has decided the fate of its unsold Yeezy merchandise. According to the company’s CEO, Bjørn Gulden, during an investors’ conference held on Thursday, Adidas plans to sell off some of the inventory and donate the proceeds to organizations that were affected by Kanye West’s controversial statements.
Adidas had previously announced that it was expecting a staggering $1.3 billion loss in revenue this year due to its inability to sell the Yeezy clothing and footwear collection. The company had been under immense pressure from its investors to solve the inventory problem following its decision to terminate its partnership with West, who legally changed his name to Ye.
It is unclear how much of the unsold merchandise Adidas will be able to sell, but the company’s CEO has stated that the proceeds will be directed towards organizations that were negatively impacted by West’s statements. The move is seen as a way for Adidas to recoup some of its losses and make amends for any perceived support of West’s controversial statements.
Adidas has decided to sell off some of its unsold Yeezy inventory and donate the proceeds to organizations affected by Kanye West’s controversial statements. This decision comes after the company faced pressure from its investors to address the inventory issue following its termination of the partnership with West. While it is uncertain how much of the inventory will be sold, Adidas hopes to recover some of its losses and support organizations impacted by the situation.
Adidas to Sell Unsold Yeezy Merchandise and Donate Proceeds to Affected Organizations
During the investors’ conference on Thursday, Adidas CEO Bjørn Gulden confirmed that the company would be selling some of its unsold Yeezy merchandise, with the proceeds being donated to organizations negatively impacted by it Kanye West’s controversial statements. The CEO acknowledged that the details of the sale and donation are yet to be finalized, but the company is actively working on finding solutions.
Gulden emphasized that Adidas has been searching for ways to address the inventory problem since the termination of the partnership with West last fall. While the decision to sell the unsold merchandise and donate the proceeds is a step in the right direction, the company is still exploring the best way to execute this plan.
The conference transcript provided to CNN by Adidas confirms that the company will not burn the leftover merchandise. This decision is likely well received by consumers and investors alike, as burning the merchandise would have had significant environmental and ethical consequences.
According to a transcript provided to CNN from Addidad, 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 added that the company has been “trying to find solutions” since the partnership was terminated last fall and decided against burning the leftover merchandise.
The firm Faces Shareholder Lawsuit Over Kanye West Controversy
In October 2022, Adidas ended its nearly ten-year partnership with Kanye West, also known as Ye, following the rapper’s controversial statements and actions. The decision came after West was seen wearing a “White Lives Matter” t-shirt, a phrase categorized as a hate slogan by the Anti-Defamation League due to its association with white supremacist groups such as the Ku Klux Klan. In addition, during a podcast taping, West made antisemitic comments and declared that Adidas could not drop him despite his behavior.
Terminating the partnership was a financial blow to Adidas, as the highly profitable Yeezy line had contributed significantly to the company’s sales. During its recent earnings report, Adidas revealed that losing the Yeezy line had caused a sales decline of approximately 400 million euros ($441 million).
Adidas is now facing a lawsuit from shareholders who allege that the company failed to warn investors about West’s controversial statements and behavior. The lawsuit specifically mentions the rapper’s antisemitism and extreme behavior. In response, Adidas has stated that it rejects these claims and will take all necessary measures to defend itself against them.
Terminating the partnership with West has been a challenging experience for Adidas financially and legally. However, the company’s decision to sell its unsold Yeezy merchandise and donate the proceeds to organizations affected by West’s statements is a positive step towards addressing the situation. It remains to be seen how Adidas will move forward from this controversy, but the company appears committed to finding a responsible solution.