When Kanye West and Adidas ended their business partnership last year, it left the athletic apparel giant in a bind. According to Associated Press via Rolling Stone, that’s left the athletic apparel company with $1.3 billion of unsold product with which it does not know what to do. Adidas CEO Bjorn Gulden said during a conference call today that “options are narrowing,” but the company is “getting closer and closer to making a decision.”
Unfortunately, there’s no real win here for Adidas, since selling the shoes would force the company to pay royalties to West, while removing the Yeezy branding could be seen as dishonest. Giving them away means lost profit as does destroying them all, which Adidas is “trying to avoid.” Gulden also didn’t want to reveal just how much backstock the company is sitting on because of the effect that could have on demand, but did admit that the split is “of course hurting us.”
However, it likely would have hurt Adidas — a company with questionable origins — even more, in the long run, to keep Kanye on. The mercurial rapper had always been a controversial figure but became downright toxic last year, sharing antisemitic views on social media and in a string of bizarre interviews with right-wing figures. He also terrorized employees at Adidas, even displaying porn during meetings — an HR nightmare if ever there was one.
Adidas could take even more of a hit now that shareholders have filed a class-action lawsuit against the company for not cutting ties with Kanye sooner. The suit claims that higher-ups at Adidas knew Kanye was a liability and kept working with him anyway, deeming the risk to its stock price worth it for the revenue the association generated. Adidas’ response said its leaders “outright reject these unfounded claims,” but between losing its Kanye and Beyoncé partnerships in the span of a year, the company can’t deny it’s made some costly mistakes.
