adidas CEO Bjørn Gulden told management at the company’s Annual General Meeting yesterday (11 May 2023) in Germany, selling the remainder of the Yeezy stock from the now-defunct partnership with Kanye West and donating the proceeds to charity was a better option than burning it.
Adidas’ Gulden explained: “For the last four months we have been trying to find solutions on what to do with it [Yeezy stock]. Burning the goods is not a solution. Talking to NGOs, and other organisations hurt by Kanye’s remarks, they all said no, that burning is not the solution. What we are trying to do now over time is to sell parts of this inventory and donate money to the organisations that are helping us and that were also hurt by Kanye’s statements. How we will do that and when is unclear, but we are working on those things. But I think burning the products is not the point. And we will update you as soon as that decision is made.”
Adidas says its decision to end the Yeezy partnership significantly impacted sales during the reported quarter, reducing revenue by approximately €400bn, primarily affecting sales in the North America, Greater China, and EMEA regions.
Adidas struck a long-term deal with rapper-turned-designer Kanye West in June 2016 for the Yeezy brand in what it called “the most significant partnership ever created between an athletic brand and a non-athlete.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Speaking to Just Style, Pippa Stephens, a senior apparel analyst at GlobalData, notes that Adidas has nearly dodged a bullet because destroying all remaining Yeezy stock would have inevitably resulted in mass criticism from consumers.
“Adidas’ decision to sell its remaining Yeezy stock and donate the money to charity is a sensible move, as its other options of either profiting from the sale of the products itself or destroying all remaining stock would have inevitably resulted in mass criticism from consumers. It would also have risked damaging its brand perceptions in the long-term, whereas its charitable actions are a way for it to now receive good publicity, after months of being condemned for its slow reaction following Kanye West’s offensive remarks.”