Adidas may be forced to burn $500 million worth of Yeezy sneakers after hastily severing ties with rapper Kanye West over anti-Semitic comments last year.
The German sportswear giant has few good options left for its Yeezy brand — a once-popular and lucrative part of its business that was irrevocably tainted during West’s high-profile meltdown.
If Adidas is unable to find a buyer for the sneakers, one possible way to resolve the dilemma would be to “literally burn the shoes.” The Washington Post reportedCiting industry experts. Adidas’ remaining Yeezy inventory is estimated to be between $300 million and $500 million.
Adidas wouldn’t be the first company to set fire to its product. Several retailers, including Burberry, Coach, Victoria’s Secret, Louis Vuitton and Nike, have chosen to destroy unsold items as a means of clearing excess supplies.
Experts warned that the practice, while relatively common, would have “the worst possible outcome” as it would not generate revenue and could create a backlash on waste and environmental costs.
Analysts told The Washington Post that Adidas may choose to rebrand its Yeezy sneakers and try to sell them at a discount. Before West’s anti-Semitic tirades, the sneakers could sell for around $600 a pop.
According to Wedbush analyst Tom Nikic, any attempt to resell “Zombie Yeezys” under a new label carries its own risks.
“It could backfire on them from a PR perspective,” Nikic told the outlet. “It still looks like they were benefiting from a collaboration with someone who made outrageously contradictory statements.”
Other possible concepts include liquidating or donating leftover Yeezy sneakers at discount stores.
The Post has reached out to Adidas for comment.
Last month, Adidas warned investors that its Yeezy inventory backlog could result in a loss of about $1.3 billion in revenue.
The company warned that Yeezy’s debacle could take a more than $500 million hit to its operating profit this year.
“Should the company inevitably decide not to carry forward existing Yeezy product, this will result in a write-off of existing Yeezy inventory,” the company said in a post on its website. said in a post on his website.
West, who has changed his name to Ye, dropped out of the Forbes billionaires rankings after losing his Adidas deal and several other partnerships due to the scandal.
