Adidas, the global sportswear brand, is still wrestling with the fallout from rapper Kanye West’s controversial anti-Semitic comments made last year. In a bid to distance itself from the scandal, Adidas severed ties with West in October. Now, it finds itself in a quandary: what to do with the billions of dollars’ worth of West-branded Yeezy merchandise still in its inventory?
The Yeezy sneakers, highly sought-after by sneaker enthusiasts, are known to sell at considerable premiums on secondary markets. Adidas, however, faced with a massive inventory of these popular sneakers, was initially torn between a number of options. Among them were destroying the unsold Yeezy sneakers and clothes or possibly donating them.
However, Adidas has now decided to sell off the remaining Yeezy merchandise, with a significant portion of the proceeds going towards charities such as the Anti-Defamation League. By doing so, the company aims to strike a balance between economic feasibility and social responsibility.
Adidas’s move has drawn mixed responses. While some sneakerheads may be enticed by the prospect of snagging a pair of Yeezys, others may be deterred due to the controversy surrounding West’s comments. It remains to be seen who exactly will be buying these shoes now. It could be those who want to combat hate, as some of the money from the sales will be funneled towards charitable organizations.
Yet, a few ambiguities persist. For instance, the exact numbers and volumes of Yeezy sales, as well as how much money will be donated to charity, remain undisclosed. While Adidas asserts that a “significant amount” will be donated, it is unclear what share of the sales will be retained by the company.
Estimates suggest that there may be over $1 billion in unsold inventory, accumulated prior to the October fallout. Dealing with this issue could cost Adidas up to $700 million, underscoring the significant financial implications of their association with the controversial rapper.
As Adidas forges ahead with its plan, the success of their strategy hinges not only on the ability to sell this inventory but also on how they manage public perception and uphold their social responsibilities in light of the controversy.