Adidas’s new chief executive Bjorn Gulden said a sale of Yeezy products may be coming after several non-governmental organizations advised the sports apparel maker against incinerating them.
“Burning is not the solution,” Gulden said at the company’s annual shareholder meeting, adding that many NGOs Adidas spoke with agreed with that opinion. “What we are trying to do over time is to sell parts of these goods and then donate to organizations that help us and that also have been hurt by Kanye’s statements,” the CEO said.
Adidas said in March it was mulling the idea of selling Yeezy products and donating the profit to charity, as Gulden tries to offset some of the huge financial hit from the collapse of the alliance with rapper Ye, formerly known as Kanye West. The CEO said Thursday it’s not clear when and how Adidas will do that, though the company is working on the issue.
Adidas warned in February that if it has to write off all existing Yeezy inventory, it would have an operating loss of as much as €700 million in 2023. That would be the company’s first loss in at least three decades.
Yes, the US has higher income per capita than Europe, but what is the real measure of a wealthy nation?
Your work questions answered: Can bonuses be deducted pro-rata during a maternity leave?
China the key for tech’s raw materials whether Trump likes it or not
Belfast-based watchmaker Nomadic moves with the times to reinvent retail experience
That bleak forecast assumes that Adidas gets no revenue from its inventory of Yeezy products, some of which only recently arrived at Adidas warehouses and which have a retail value of €1.2 billion, Gulden pointed out on Thursday. If Adidas can sell some of those goods, it could potentially recoup some of the related costs, which are about €500 million.
The decision over what to do with the Yeezy inventory is “unbelievably complicated,” Gulden said. Ye caused a great deal of pain with his string of antisemitic rhetoric last fall, and Adidas did the right thing in ending the partnership in October, Gulden said. But Ye has a community that strongly supports him, and there’s no way of resolving the Yeezy inventory situation without upsetting some people, the CEO said.
Shares of the company rose as much as 2.4 per cent in Frankfurt. --Bloomberg
