Adidas tackles inventory woes with strategic Yeezy shoe sale

Adidas has at last addressed the conspicuous overhang of 1.2 billion euros worth of Yeezy sneakers that has been weighing down its inventory. In a move aimed at rectifying the situation, the German sportswear giant confirmed its plan to sell the unsold Yeezy shoes while allocating a portion of the proceeds to charitable causes.

Adidas CEO, Björn Gulden, made it clear on Thursday that the decision to sell rather than destroy the shoes was a result of practical considerations. The destruction of the merchandise, usually done by burning, "did not make sense," prompting the company to explore alternative avenues. By attempting to sell parts of the product, Adidas aims to maintain control over their distribution, ensuring that the unsold shoes do not indirectly enter the market.

Mr Gulden confirmed an undisclosed percentage of Yeezy sales will be directed towards charities representing individuals who may have been adversely affected by the controversial remarks made by Kanye West, formerly known as Ye. This strategic move aligns with Adidas' long overdue commitment to acknowledging the concerns raised by West's inflammatory comments and supporting those impacted by them.

Ye will continue to receive royalties from future Yeezy sales

Despite the disassociation from Yeezy, it is worth highlighting that Kanye West will continue to receive royalties from any future sales. This underscores the enduring nature of their complex business arrangement, despite the recent setbacks suffered by Adidas, including substantial revenue losses and reporting the first annual loss in over three decades.

In response to the announcement, Adidas experienced a 2 percent rise in its share prices, indicating a degree of investor confidence in the company's steps to finally address the Yeezy inventory predicament. Adidas remains in hot water, however, as it also finds itself entangled in a legal dispute with investors alleging the company was aware of Kanye West's contentious behaviour long before the partnership was terminated. The investors further contend that Adidas neglected to mitigate financial losses and take adequate precautions to limit their exposure to such risks.

As Adidas forges ahead with its strategy to sell off the excess Yeezy inventory, the outcome of these legal proceedings remains uncertain. Nevertheless, the company's commitment to transparency and accountability in managing its business challenges is evident, as it navigates the complex terrain of fashion, celebrity collaborations and public scrutiny.