Adidas has finally decided what to do with its stockpile of unsold Yeezy merchandise, months after the company cut ties with the rapper formerly known as Kanye West.
At a shareholders meeting Thursday, CEO Bjorn Gulden said Adidas will sell a portion of its remaining inventory and donate the proceeds to charitable organizations.
"Burning is not the solution," Gulden said. "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."
Adidas terminated its partnership with the disgraced rapper in October of last year following several controversial statements he made about Jewish people.
"Adidas does not tolerate antisemitism and any other sort of hate speech," the company said in a statement at the time. "Ye's recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company's values of diversity and inclusion, mutual respect and fairness."
Adidas then decided to halt production of its line of Yeezy products, which has been a major source of revenue for the company since its launch in 2015.
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Following the split with Ye, Adidas lost more than $655 million in sales during the final quarter of 2022, the company reported last week. Net sales were also down 1% in the first three months of this year, with the company saying it would've risen by 9% if its Yeezy line was kept on the market. Now Adidas is trying to stage a comeback with its $1.3 billion worth of unsold product.
However, it remains unclear whether Ye is still obligated to a portion of sales from the stockpile. There was also no mention at the meeting about which organizations would receive donations.
Additionally, the company is still entangled in a class-action lawsuit filed by investors, claiming Adidas was aware of Ye's offensive remarks and controversial behavior years before the company decided to end its alliance with him. Adidas has denied the allegations.
Shares of the company were down about 1.4% shortly after markets opened Friday morning.
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