Adidas has saved millions of pairs of shoes and doesn’t know what to do

Adidas’ new CEO has $1.3 billion worth of Yeezy sneakers and doesn’t know what to do with them. Kept in stores and warehouses around the world, the shoes went on sale after the controversy with rapper Kanye West.

Since the Yeezy Boost 750 was released in February 2015, the Yeezy brand has become a hallmark for Adidas. But it all came to a head when Kim Kardashian’s ex-partner launched anti-Semitic remarks in October last year. He questioned corporate executives about their Jewish ancestry and endorsed the theories of a group of white supremacists. This cost him his contract with Adidas.

“The funny thing is, I really can’t be anti-Semitic because black people are Jewish too. You have been fooling me and trying to eliminate anyone who opposes your agenda,” she said in a message in which he seemed to defend himself against any interpretation.

Now Bjorn Gulden, who took over Adidas in January, is trying to stabilize the German company, and the dire loss of a profitable line is just one of his problems.

Last year, sales in China, its biggest market, fell more than 35% as the country extended its lockdown to curb covid and Russia’s decision to withdraw after it invaded Ukraine cost about 62 million dollars. . It’s also losing market share to Nike and other rivals.

He said the company is still trying to decide what to do with its remaining stock of Yeezy sneakers and other activewear. Adidas doesn’t know how to sell the thousands of pairs it has in store or whether it will donate the shoe to “do something good,” as the executive put it.

For now, he’s ruled out that Kanye West’s line will be destroyed.

Adidas, which has been criticized for not acting fast enough on the rapper, described his comments and behavior as “unacceptable, hateful and dangerous, and violate the company’s values ​​of diversity and inclusion, mutual respect and fairness.”

The breaking of the deal with West has left the company with a mountain of shoes and clothing, with a potential loss of 1.2 billion euros in sales and around 500 million euros in profit this year.

When the contract was terminated, Gulden said, Adidas decided to continue production of the planned Yeezy products to prevent thousands of those involved from losing their jobs. The future of that inventory is now in doubt.

“If we sell it, I promise the people who have been hurt by this will also get some good out of it,” Gulden said. He didn’t elaborate, but added that donating the proceeds would make more sense than just giving away the shoes. that have outsized value on the resale market among collectors and other enthusiasts.

Before last year’s scandal, Yeezy sneakers sold for hundreds of dollars a pair.