After cutting ties with Kanye West, the sneaker company is unsure of what to do with nearly half a billion in unsold merchandise
For a time, Kanye West’s Yeezy sneakers were one of the most coveted pairs of shoes. But that’s since changed—and it has the brand’s parent company, Adidas, in a bind.
The German sneaker behemoth is sitting on US$300 million to US$500 million of unsold Yeezys, after cutting ties with West following his public turn toward anti-Semitism, The Washington Post reported on Monday. A final decision on what the company will do with the shoes is still months away, but options range from selling them without the Yeezy branding to literally burning them.
In late October, Adidas finally split with West, one of the last companies associated with the rapper to do so. (That also resulted in him losing his billionaire status.) At first, officials at the brand thought they could rebrand the Yeezy shoes and sell them at a discount. But that strategy might not be viable, and Adidas more recently said that it could be looking at major losses.
This month, the company announced that it could lose as much as US$1.3 billion in revenue and US$530 million in operating profit if it can’t find a new use for the Yeezys. “What makes this so dramatic is how big it is,” the analyst Tom Nikic told the Post. “That’s really a big, substantial part of [Adidas’s] business.”
At this point, Adidas has several options for what to do with the shoes, but none of them are all that appealing. It could sell them at a discount and without the label, like “zombie Yeezys,” as Nikic called them. But that could make it seem like Adidas is still profiting off an anti-Semite, he added. Other routes include liquidating the shoes through discount stores or selling them off by the pound.
A more unsavoury choice would be destroying the shoes altogether, by burning them. The practice isn’t uncommon in the fashion industry, and brands including Burberry and Louis Vuitton have intentionally destroyed products in the past. But that comes with loads of negative attention, given the ethical and environmental questions involved in setting millions of dollars’ worth of goods on fire for no real reason.
Perhaps, as the professor Elizabeth Napier suggested to The Washington Post, Adidas will donate the Yeezys to disaster relief, such as efforts to help those affected by the recent earthquakes in Turkey and Syria. While that would certainly lend the company some goodwill in the eyes of the public, it still wouldn’t help with the financial issues, meaning even that is a losing prospect for Adidas.
This article was first published on Robb Report USA