Adidas is considering writing off its remaining inventory of Yeezy merchandise, valued at $320 million by the company, chief executive Bjorn Gulden said Wednesday—as the German footwear firm separates from the brand designed by Kanye West, who lost his partnership with Adidas following a string of antisemitic remarks.
Gulden said Wednesday that a scenario in which the company writes off its Yeezy inventory is “financially the worst case,” according to the Associated Press.
The company has sold hundreds of millions of dollars’ worth of leftover Yeezy shoes, and Gulden reportedly said “we of course hope we can do more drops next year and we can get more value out of it and donate the proceeds,” but no decision has been made.
Gulden also said the company had stored its Yeezy inventory in several locations and declined to say what the company would do if the inventory remained unsold.
Adidas included a possible write-off of the Yeezy inventory in its outlook Wednesday for its earnings this year, suggesting in its full-year guidance that it expects about $106 million in operating losses this year after a previous prediction of a $481 million loss.
$374.7 million. That’s how much revenue Adidas generated from Yeezy sales through the third quarter. Yeezy merchandise generated about $437 million in revenue in the second quarter, which Adidas said was in line with Yeezy sales during the same quarter last year. The company generated $1.28 billion from Yeezy sales through all of last year.
Adidas ended its partnership with West last year after the rapper made a series of antisemitic comments on social media. The company announced earlier this year it would start selling some of its remaining Yeezy inventory—valued then at $1.28 billion—and donate a “significant amount” of sales to organizations combating racism and antisemitism. Adidas previously explored a write-off of its remaining Yeezy inventory in August, which the sportswear firm estimated the write-off would cost the company an additional $437 million. Adidas similarly estimated its “discontinuation of the regular Yeezy business” cost the company about $437 million in the first half of 2023. A write-off would reduce the value of the brand in Adidas’s financial statements.