Seven months after Adidas cut ties with Ye, the breakup continues “hurting” the brand as boxes of once-popular Yeezy shoes are still piling up in warehouses, the company’s top executive said.
Adidas CEO Bjørn Gulden said in a statement released Friday alongside the brand’s Q1 earnings that “the loss of Yeezy are of course hurting us.”
The report revealed that Adidas saw a “20% sales decline in North America — down 5% excluding Yeezy.”
Gulden blamed the decrease, in part, on “the high levels of inventory.”
However, Adidas is “getting closer and closer to making a decision” what to do with the sneakers,” Gulden told AP News in a Friday conference call.
He added that there are “so many interested parties” involved in the conversation, but a decision has yet to be reached.
Although Gulden didn’t clarify to AP whether or not Adidas planned on destroying the shoes, he did say that the company was “trying to avoid that.”
“Depending on who you speak to, people will say you cannot destroy because it’s a sustainability issue, right? So, please don’t destroy. And then, those who are like, ‘Please don’t sell because you have a reputation issue,’” Gulden said during an earnings call in March.
And other costly options like rebranding the sneakers or simply burning them also have apparent downsides.
Thus, German sportswear company is faced with $1.3 billion worth of unsold Yeezy shoe inventory after it cut ties with the famed rapper, formerly known as Kanye West, over his anti-Semitic outbursts and public meltdowns.
Gulden told AP that Adidas reported a $441 million loss in sales at the start of 2023.
However, if the $1.3 billion worth of stock goes unsold, Adidas could be looking at a $552 million profit loss this fiscal year.
“2023 will be a bumpy year with disappointing numbers,” Gulden said in Friday’s statement, seemingly at terms with the fact that Adidas will face millions in profit losses.
He also said that this year, “maximizing our short-term financial results is not our goal. It is a transition year to build a strong base for a better 2024 and a good 2025 and beyond.”
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