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Topics: Kanye West, Celebrity, Money, Fashion, US News, World News
Poppy Bilderbeck
Topics: Kanye West, Celebrity, Money, Fashion, US News, World News
The CEO of Adidas has revealed how far along the company is in reaching a solution over what to do with all its spare Yeezy shoes.
Adidas terminated its Yeezy partnership with the rapper in October last year (2022) after West - now officially known as Ye - shared a series of antisemitic posts on social media.
However, as a result, the sportswear company has now been left with a whopping amount of the trainers left unsold in its warehouses.
But what will Adidas do with them?
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After cutting ties with the rapper - a petition calling for the company to terminate its involvement with Ye reaching over 100,000 signatures - Adidas released a statement condemning the rapper's anti-semitic remarks.
It read: "Adidas does not tolerate antisemitism and any other sort of hate speech.
"Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.
"After a thorough review, the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products and stop all payments to Ye and his companies.
"Adidas will stop the Adidas Yeezy business with immediate effect."
In a conference call on Friday (5 May), Adidas CEO Bjørn Gulden revealed the 'options are narrowing' on what the company will decide to do with the trainers, as per CBS News.
However, he noted there being 'so many interested parties' has made it difficult to find a simple resolution and many options are also flawed.
If Adidas choose to simply give the shoes away, the Yeezys may be resold for a much higher price; if the company restitches over the Yeezy branding it could be seen as being shady and there's also still a potential risk of money still finding its way into Ye's pockets.
But Gulden did stress Adidas is 'trying to avoid' simply destroying the shoes.
Gulden continued by explaining Adidas is getting 'closer and closer to making a decision' on how to use the unsold Yeezys - particularly in a way to help bounce back from the money lost soon after the company cut ties with Ye.
The company revealed its financial guidance for 2023 which predicts it could be set to lose up to $1.2 billion from the unsold Yeezys.
The statement continues: "While the company continues to review future options for the utilization of its Yeezy inventory, this guidance already accounts for the significant adverse impact from not selling the existing stock.
"This would lower revenues by around €1.2 billion ($1.28 billion) and operating profit by around €500 million ($534 million) this year. Against this background, Adidas expects currency-neutral sales to decline at a high-single-digit rate in 2023. The company’s underlying operating profit is projected to be around the break-even level."
However, not all hope is lost, with Gulden acknowledging while cutting ties with Ye is 'hurting' Adidas, the company is starting to try and regrow and its results have been 'a little better than expected'.