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Adidas, the parent company of Kanye West’s Yeezy sneaker line, is reportedly facing a challenge with unsold Yeezy merchandise worth $300 million to $500 million, after severing ties with the rapper due to his controversial remarks about anti-Semitism. That is almost 63.4 billion Kenyan shillings planning on being set ablaze.
While a final decision on how to handle the inventory has yet to be made, possible options include selling the shoes without the Yeezy branding or disposing of them altogether, even through methods such as burning.
Wedbush analyst Tom Nikic has warned that any attempt to resell the unsold Yeezy sneakers under a different brand name could pose PR risks for Adidas.
Nikic expressed concern that such a move could be viewed as a way for the company to profit from its association with Kanye West, despite his controversial remarks about anti-Semitism. This could potentially damage Adidas’s reputation and brand image in the eyes of consumers.
In October of last year, Adidas ended its business relationship with Kanye West, which made him lose his billionaire status.
Initially, the company had planned to rebrand the Yeezy sneakers and offer them at a reduced price to sell the remaining inventory. However, this strategy may not be effective, and Adidas has since announced that it could incur significant financial losses due to the unsold Yeezy merchandise.
Adidas has recently declared that it could suffer a loss of up to $1.3 billion in revenue and $530 million in operating profit if it fails to find an alternate solution for the unsold Yeezy sneakers.
According to analyst Tom Nikic, the situation is significant due to the sheer scale of the losses, which would severely impact Adidas’s overall business performance.
