In October, Adidas cut ties with rapper Ye — formerly known as Kanye West — following antisemitic remarks and unprofessional behavior. The partnership had spanned nine years.
Since the breakup, the German footwear brand has faced a slew of obstacles — from a lawsuit by Adidas investors accusing the company of failing to warn them about the rapper’s “extreme behavior,” to ongoing financial hits (Adidas said it expects to lose $1.3 billion this year). Now, on top of it all, the company is stuck with a monster stockpile of unsellable Yeezy shoes made in collaboration with the rapper.
During the annual shareholder meeting on Thursday, Adidas CEO Bjorn Gulden said the company spent months figuring out what to do with $500 million worth of Yeezy inventory, and a host of options were on the table — including literally burning them to dust.
However, the company decided that it will, after all, sell the shoes. Gulden said that the proceeds of the purchased inventory will be donated to charities “that are helping us and that were also hurt by Kanye’s statements.”
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The mechanics of the sell-off are still in the works, but Gulden said Adidas is working out the details. The organizations that will receive the donations have not been named yet.
“Ye is a difficult person, but he’s arguably the most creative person in our industry,” Gulden said on the call. “Unfortunately, we also know what he did, and I think it was the right thing for us to terminate the contract.”
The CEO added that the $500 million in Yeezy inventory had a selling value of over $1 billion.