Adidas could face a loss of more than $500 million due to the backlog of Yeezy inventory they still have. A few months ago, the brand decided that wouldn’t continue selling Yeezy products because of the antisemitic statements that brand collaborator Kanye West (Ye) was reported to have said. They warned investors last month that they could take a loss in revenue at nearly $1.3 billion because of the issue. So, for now, adidas is considering that their only option is to burn the Yeezy sneakers.
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Adidas Might Burn The Yeezy Sneakers
Adidas execs are at a loss for what to do with the $300 million to $500 million worth of Yeezy sneakers they have backlogged that aren’t selling. The once-popular collaborative brand has faced immense backlash after the brain behind the brand, Ye, made antisemitic statements, tainting the brand forever. Adidas hastily cut ties with the rapper over a year ago.
The Washington Post reported that one of the resolutions that Adidas is looking at for the situation is “literally burning the shoes”, citing several industry experts. They wouldn’t be the first big brand to have this idea and actually go through with it, as they would follow in the footsteps of retail giants like Burberry, Coach, Louis Vuitton, Victoria’s Secret, and even one of their biggest competitors, Nike. However, industry experts have warned against this course of action, as it would be the worst possible outcome for Adidas. By burning the Yeezy sneaker stock, adidas would generate no revenue from the loss. In addition, they could spark even more backlash over the waste of products and the environmental cost of it.
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Other Possible Options
Although this path of a blazing fire is what Adidas is considering, they have been advised to take different courses of action. The first option they could take is rebranding the Yeezy sneakers and selling them for a discounted price. Although this would undoubtedly solve their problem of not making any revenue out of the situation, it also comes with its own risks.
Wedbush analyst Tom Nikic commented on the fidelity of this option, saying, “It could backfire on them from a PR perspective. It would still look like they were profiting [from] a collaboration with someone who made blatant antisemitic statements.” However, at this point, the sports brand seems to be damned if they do and damned if they don’t.
Luckily, they have one safe option, although it still comes at a loss. Instead of writing off the stock and spending the time and resources to burn the sneakers, they could still write them off and supply them to discount stores or donate them to Goodwill or charities. If the charities want anything to do with the antisemitic branded shoes in the first place, this would be a great, low-impact way to get rid of the stock and help hundreds of people in great need of footwear for their everyday lives.
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TL;DR
- After the antisemitic comments of Kanye West, Adidas is at a loss as to what to do with their $300 million to $500 million inventory of Yeezy sneakers.
- They are seriously considering burning their backlog of Yeezy sneakers to solve the problem.
- They have been advised against this course of action, but who knows what they will decide to do?
