Adidas CEO Decides On Unsold Yeezys
As the popular Yeezy shoe collects dust, Adidas has yet to release a plan on repurposing unsold shoes. Adidas CEO Bjorn Gulden believes the company is closer to decision day, knowing the frustrations of patient investors.
Ye – Adidas Split
More than six months ago, Adidas terminated its partnership with Ye after he made antisemitic comments. In addition, Ye publicly complained about his contract to Adidas in which he tweeted how Adidas ‘raped and stole his design.’
“Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness,” Adidas stated in October of 2022.
Cutting partnership ties included no longer producing Yeezy products and stopping residual payments to Ye. The swift decision came with no bounce back plan and planning time costs. Idle time for frustrated investors leads to drastic thinking, such as a lawsuit against Adidas for knowing Ye’s problematic behavior before the partnership. Anything to add pressure of making a decision.
Variables To Weigh Moving Forward
In February, Adidas estimated not selling existing merchandise will cut the company’s revenue by $1.28 billion dollars and operating profit by $533 million. Destroying the shoe is no option because of the money that would go down the drain. Other options have drawbacks to play into factor of integrity and big picture cost. Selling the sneakers pays royalties to Ye. Restitching and removing the Yeezy brand is dishonest to the shoe itself. And giving the shoes away in philanthropy could lead to resale by customers due to high market value.
“I probably got 500 different business proposals from people who would like to buy the inventory. But again, that will not necessarily be the right thing to do, so a very difficult, sensitive situation,” Gulden said last Friday. In addition, the company is working through three to four scenarios with interested parties. A repurpose plan is near, but time is ticking.
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