Adidas tries new strategy to get rid of sneaker stock created by rapper Kanye West | Investment abroad

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Adidas today announced a new measure to eliminate its unsold Yeezy stock. The German sportswear giant plans to sell the remaining shoes for “at least” the cost it paid for them as the clothing retailer seeks to recoup its losses.

According to the American website CNBC, the company had already considered writing off around 300 million euros, or US$325 million, in unsold Yeezy stocks, but has now decided on a “liquidation”.

In its announcement, Adidas said it managed to generate an operating profit of 268 million euros in 2023, after originally forecasting a loss of 100 million euros. The company attributed the profit to its “better than expected operating business” during the fourth quarter and the decision to sell most of its remaining Yeezy inventory.

“Following the latest decision, 2023 operating profit now only includes a low amount of Yeezy-related inventory,” Adidas said in a press release.

CEO Bjørn Gulden added: “Our consumer, retail and trade research has shown that we can sell this remaining stock in 2024 at least at cost. That’s why we only write off stock that was damaged or severely broken in size.”

Last year, Adidas sold around €750 million worth of Yeezy merchandise and donated some of the proceeds to groups including the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, a group run by George Floyd’s brother. The decision was made after Kanye West cut ties with the rapper due to a series of anti-Semitic comments he made, as well as racist statements, despite being a black man himself.

At the time of the break with the rapper, with the suspension of production and sale of Yeezy products, Adidas estimated losses of almost US$800 million. The stock, however, would reach US$ 1 billion in products from the line. It is worth noting that West was the creative behind many Yeezy collections and helped popularize the brand.

Adidas and other companies divested from West’s company. The North American brand Gap, the film and television studio MRC and the French brand Balenciaga also distanced themselves from the rapper.

West’s collaborations with other brands, including his partnerships with Virgil Abloh, the creative genius and founder of Off-White who died of cancer in 2021, were great commercial successes and consolidated the trend of streetwear (urban style) returning as a symbol of luxury in the world of high fashion.

Yeezy Boost 350 sneaker model — Photo: Disclosure