Adidas’ decision to sever ties with Kanye West continues to have rippling effects, as the brand has reported a loss of 400 million euros ($441 million) year to date due to unsold Yeezy stock.
According to Associated Press, Adidas still has $1.3 billion in Yeezy products after pulling all items related to the rapper following the anti-semitic remarks he made in September 2022. The sneaker and apparel giant remains uncertain of what it will do with the stock, although new Adidas CEO Bjorn Gulden reportedly said the company was “getting closer and closer to making a decision” and that “options are narrowing.”
Possible courses of action in disposing of the stock include selling the remaining Yeezy products outright, removing Yeezy branding from the shoes, giving the shoes away, or destroying them. However, each option comes with its own downsides, such as royalties being paid to West for the sale of the shoes and opportunistic resellers on secondary markets.
While Gulden has said that Adidas has attempted to “avoid” destroying the Yeezy inventory, it remains a possibility at this point in time. The amount of remaining Yeezy sneakers in stock hasn’t been undisclosed, as the company does not want to tip off the consumer or the market as to what the valuation of each pair would be, thus potentially offering the demand for the product.
Adidas’ split with Kanye has left a seismic impact on the brand. In 2022, it reported hundreds of millions in losses. And if Adidas fails to sell the leftover Yeezy products, the company could be on the hook for over a half-billion dollars in 2023.