Adidas to sell Yeezy shoes and donate proceeds months after Kanye West split
FILE - A sign is displayed in front of an Adidas retail store in Paramus, N.J., Oct. 25, 2022. After months wrestling over the fate of millions of unsold Yeezy shoes, Adidas has decided to sell a portion of its remaining inventory and donate the proceeds to charitable organizations, CEO of the German sport brand Bjørn Gulden said Thursday, May 11, 2023. (AP Photo/Seth Wenig, File)
Wyatte Grantham-philips, The Associated Press
Published Thursday, May 11, 2023 5:04PM EDT
WASHINGTON (AP) - After months wrestling over the fate of milions of unsold Yeezy shoes, Adidas said Thursday it will sell a portion of its remaining inventory and donate the proceeds to charitable organizations.
The German sportsware company cut ties with Ye, the rapper formerly known as Kanye West, in late October, following his antisemitic comments on social media and in interviews. Since then, the fate of 1.2 billion euros ($1.3 billion) worth of the unsold Yeezys, a lucrative sneaker line launched with Ye, has been up in the air.
At Adidas' annual shareholders meeting, CEO Bjorn Gulden said the company had spent months trying to find solutions. He said the company spoke to nongovernmental organization and groups that were harmed by Ye's comments and actions.
“Burning those shoes cannot be the solution,” Gulden said, adding that Adidas will try to sell part of the remaining Yeezy inventory and “donate money to the organizations that help us and were harmed by what Ye said.”
Exact details of the plan - including how many shoes will be sold and the timeline of selling them - were not disclosed. Gulden said the company will provide updates as it moves forward.
The move comes as Adidas is trying to stage a comeback and move beyond the Yeezy partnership. Cutting ties with Ye has cost the company hundreds of millions of dollars - contributing to a loss of 600 million euros ($655 million) in sales for the last three months of 2022, helping drive the company to a quarterly net loss of 513 million euros.
Adidas reported 400 million euros ($441 million) in lost sales at the start of 2023, the company announced last week.
Net sales declined 1% in the first quarter, to 5.27 billion euros, and would have risen 9% with the Yeezy line, the company said. It reported a net loss of 24 million euros, a plunge from a profit of 310 million euros in the same period a year ago.
Operating profit, which excludes some items like taxes, was down to 60 million euros from 437 million euros a year earlier.
Meanwhile, Adidas is also facing a class-action lawsuit from investors who allege the company knew about offensive remarks and harmful behavior from Ye years before terminating its pact with him. Adidas has pushed back on the allegations made.
Still, Gulden reminded investors that the nine-year partnership between Adidas and Ye was “sensational.”
While he noted that Ye is a difficult person, “he's the most creative person in our industry,” Gulden said. “He created a model with Adidas that was sought after around the world.” But he added, “We lost that in a month.”
AP Business Writer David McHugh in Frankfurt, Germany, and AP Retail Writer Anne D'Innocenzio in New York contributed to this report.