With only seven weeks of tenure under his belt new Adidas CEO Bjorn Gulden is faced with a legacy defining decision. What to do with $1.3 billion in Yeezy stock?
Not only has the vast majority of the stock already arrived at Adidas warehouses but apparently has been dispatched to facilities worldwide making the logistics of any decision a real challenge. According to a report from Bloomberg, Gulden is considering selling the Yeezy stockpile and donating the profits to charity. A move like this could help Adidas mitigate huge financial loss and possibly give them a few PR points after the drama with Ye.
While the numbers sound staggering the brand wouldn’t have to look that hard for potential buyers. Gulden quotes “So many companies” already lined up to cash out Adidas for the remaining Yeezys. The brand however, wasn’t keen on the idea of paying royalties to Ye according to an article by AP News.
If Adidas decides to sell off the Yeezys in any fashion the brand will still owe Ye his share as their royalties contract is still valid even though the two parted ways in October 2022. The split is said to have cost Adidas €600 million in lost sales driving the company to a year end net loss of €513 million as reported by AP News. Unless Gulden and company can find some sort of golden parachute Adidas will be on track to lose €700 million in 2023.
The reality is that there is no perfect solution for Adidas. According to the Bloomberg piece Adidas CFO Harm Ohlmeyer acknowledged that whatever way forward they chose will likely upset some groups but hopes to find a plan that satisfies the most amount of people.
Gulden has apparently already shot down the idea of rebranding the shoes and moving them off at a discount stating “Trying to hide what it is is not very honest…That’s not an option.” Options such outright donating the shoes or burning the inventory have also been ruled out.
There is no easy answer here but it seems that the flood of internet rumors saying there could be a new deal in place with Ye seem to be nothing more than hearsay.
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