- Adidas said it won’t write off the majority of its unsold Yeezy inventory and instead plans to sell the remaining shoes “at least” at the cost it paid for them as it looks to recoup its losses.
- The German sportswear giant had previously considered writing off about 300 million euros in unsold Yeezy inventory after it cut ties with rapper Ye over a series of antisemitic remarks he made.
- “Our consumer, retail and trade research has shown that we can sell this remaining inventory in 2024 for at least the cost price. This is why we have only written off inventory that was either damaged or very broken in sizes,” CEO Bjørn Gulden said in a statement.
Adidas announced on Wednesday that it won’t write off the majority of its unsold Yeezy inventory and instead plans to sell the remaining shoes “at least” at the cost it paid for them, as the apparel retailer looks to recoup its losses.
The German sportswear giant had previously considered writing off about 300 million euros, or $325 million, in unsold Yeezy inventory after the company cut ties with rapper Ye, formerly known as Kanye West, over a series of antisemitic remarks he made.
In its announcement, Adidas said it managed to generate an operating profit of 268 million euros in 2023 after it originally forecast a loss of 100 million euros. The company attributed the profit to its “better-than-expected operational business” during its fourth quarter and the decision to sell the majority of the remaining Yeezy inventory.
“Following the latest decision, the 2023 operating profit now only includes a low double-digit million amount of Yeezy-related inventory write-offs. Instead, the company plans to sell the remaining Yeezy product at least at cost in 2024,” Adidas said in a news release.
CEO Bjørn Gulden added: “Our consumer, retail and trade research has shown that we can sell this remaining inventory in 2024 for at least the cost price. This is why we have only written off inventory that was either damaged or very broken in sizes.”
Last year, Adidas sold about 750 million euros worth of Yeezy merchandise and donated some of the profits to groups such as the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, a group run by the brother of George Floyd.
It’s not clear if Adidas will donate any portion of the remaining Yeezy sales. The company said it has “no assumed profit contribution from Yeezy” in fiscal 2024.
The company declined to say whether it would donate any more of the proceeds this year.
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Source: Business - cnbc.com
