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Adidas will sell some items from its defunct Yeezy partnership with rapper Kanye West and donate a portion of the proceeds to an international organization, CEO Bjoern Gulden said Thursday.
The German sports giant has been in a predicament over Yeezy’s stock since it cut ties with West over antisemitic comments late last year, with the controversy weighing on the stock and reaching the bottom line.
Millions of Yeezy brand shoes with a retail value of 1.2 billion euros ($1.76 billion Cdn) are sitting in storage after the sale was put on hold.
Values on the resale market have rocketed since Adidas stopped producing them, with some models more than doubling in value.
Addressing investors in the southern German city of Fuerth after the debacle contributed to the company’s first annual loss in 31 years, Gulden said it has not been determined when and how the planned sale will proceed.
“What we are trying to do now is to sell some of these merchandise…burning them will not be a solution,” he said, adding that the proceeds would be donated to an international organization that West, which changed its name to. Ye in 2021, has been hurt by his comments.
Gulden said the company has decided not to donate the sneakers to avoid reaching the market in a roundabout way.
The question of quantity, time remains
“It’s a smart and responsible move,” said Ed Stoner, a sports industry consultant who previously worked for Adidas, adding that “it not only preserves the integrity of the brand but avoids a sustainability crisis.”
By selling some shares, the company has the potential to reduce losses of US$700 million ($944 million Cdn) this year, but it is unclear how many shares will be sold and what proportion of the proceeds will be donated.
If the item sells, you get a pre-agreed commission — 15 percent of the sale, according to media reports. Adidas declined to comment on this.
Gulden defended Adidas’ years of collaboration with the rapper, saying that “it’s hard, he’s probably the most creative mind in our industry.”
Gulden recently said that he envied Adidas for the collaboration when he was still CEO at Puma.
Alleged wrongdoing
In addition, Adidas chief financial officer Harm Ohlmeyer said on Thursday that an internal investigation into Ye’s misconduct – which included sharing pornographic material, making antisemitic comments and harassing female employees – had not confirmed the allegations.
However, the investigation also concluded that the rapper’s erratic and sometimes inappropriate behavior made for a challenging work environment at Adidas, Ohlmeyer said, adding that the company is now taking steps to prevent the problem from happening in the future.
The lawsuit in the German arbitration court in which Adidas is seeking damages from Ye is still in its early stages and no financial amount has been determined, Ohlmeyer said.
Ye did not immediately respond to a request for comment on Facebook.
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