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8th May 2023
02:49pm BST
Adidas is reportedly stuck with $1.3 billion of Yeezy shoes which are piling up in warehouses, almost seven months after splitting with Kanye West over his antisemitic remarks.
According to reports the sportswear giant doesn't know what to do with the stock as it tries to bounce back from the loss of the popular sneaker and the fallout over its partnership with the rapper, now known as just, Ye.
AP reported that Adidas is "getting closer and closer" to making a decision on the sneakers
New CEO, Bjorn Gulden, is said to have indicated on a call Friday that "options are narrowing", after the company reported a $441 million loss in sales at the start of the year.
With “so many interested parties” involved in the discussions, no decision had yet been reached, Gulden said.
Adidas ditched Ye in October in what was then a major turning point for the mogul. Things rapidly got worse from there, with companies and businesses worldwide cutting ties with him, and his fortune plummeting alongside his cultural standing.
Gulden, who took over three months after Adidas dropped Ye, refused to say if destroying the shoes had been ruled out, AP reported.
He said the company was "trying to avoid that", however, it is also reluctant to sell the sneakers and pay royalties to Ye, and removing the brand identification would be dishonest.
And giving them away could lead to resale at a higher market price.
AP said Gulden wouldn't comment on the amount of stock Adidas held, as that may impact demand for it.
He conceded losing the Yeezy brand is "of course hurting us".
If Adidas chose not to sell the remain Yeezys, their earnings could slip further to 500 million euros this year, AP projected. Net sales declined 1 per cent in the first quarter, to 5.27 billion euros, and would have risen per cent with the Yeezy line, the company said.
Despite the figures, Gulden said the results were "a little better than we had expected" after the breakup.
Investors sued Adidas a week ago in the US, alleging the company knew about Ye’s offensive remarks and harmful behaviour years before the split and failed to take precautionary measures to limit financial losses.
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