Adidas agrees to sale it’s remaining Yeezy inventory. At the end of ’22 Ye (formerly known as Kanye West) made antisemitic remarks. These remarks caused him to lose deals with Balenciaga and Adidas. For the German sportswear company this meant millions of dollars in inventory just sitting.
What to do with the Inventory?
Initially Adidas stood their ground and stated that they were not going to sell any Yeezy sneakers. If they continued to sell the shoes Ye would get a 15% royalty. That meant for every $200 Yeezy sold West gets $30. If there were one million pairs sitting in a warehouse that means West get a $30 million pay day. Adidas did not want to do this nor did he deserve this. So this posed the question…what to do with the unsold sneakers?
Option 1
Destroy the shoes. This could have been a large bonfire (break out the marshmallows). Adidas could have used an industrial shredder. This meant that resources, dollars, and marketing went into the shoes just to “throw them away”. This option seemed extreme, but considering the actions it would be justified.
Option 2
Donate them to people in need. Similar to what the NFL does with Superbowl t-shirts. Adidas could have given them to a country in need or to homeless shelters. With the resell market this posed a risk of them falling in the wrong hands and ending up on Ebay.
Option 3
Adidas does not have a stronghold in the sneaker industry. This has been and still is Nike. The first two options meant Adidas would miss out on close to $500 million of potential revenue. Adidas should just sell the sneakers.
To Sell or Not to Sell
After several different rumors and yes or no it was confirmed that Adidas will sell the remaining Yeezy inventory, but with a catch. Adidas will donate a portion of the money to charity. The money would go to organizations impacted by Ye’s comments. For Adidas this is a good business move because they will not miss out on all of the potential revenue. From a PR standpoint this is not a good move.
Ye will get his %15 royalty, so after all the comments and antics he still is rewarded financially. This proves that for Adidas morality and values mean something until it impacts the bottom line.
