Listen to this article here
Adidas has decided to sell Yeezy trainers and other products it made with Ye, formerly Kanye West, and donate some of the proceeds to charity.
The German sportswear giant cut ties with the celebrity, now known as Ye, last year after he made anti-Semitic comments.
Adidas has about 1.2 billion euros worth of Yeezy shoes sitting in storage
The decision has cost the firm millions in sales and has it facing its first annual loss in more than three decades, according to BBC.
Chief executive Bjoern Gulden said the company was still working out how the sales would happen. “What we are trying to do now over time is to sell some of this merchandise… burning the goods would not be a solution,” he said at the company’s annual shareholder meeting.
Mr. Gulden said the firm had decided to sell some of the merchandise, instead of donating it, because it did not want to see the products reach the market indirectly.
Last week, Adidas said that if it decided not to “repurpose” its remaining unsold Yeezy stock, it would hurt its operating profit by $500 million this year. Shares in Adidas were up 2% following the meeting.
A sale could help reduce some of those losses. Ye will also be entitled to some of the money, under the terms of its partnership.
The company is being sued by investors who claim Adidas knew about Kanye West’s problematic behaviour years before it ended their partnership.
Investors allege Adidas failed to limit financial losses and take precautionary measures to minimize their exposure.
Mr. Gulden defended Adidas’ years-long collaboration with the designer and musician, saying that “as difficult as he was, he is perhaps the most creative mind in our industry”.
The company said it had concluded an internal investigation into reports that the artist had created a “toxic” environment.
It said the review had not substantiated all allegations of misconduct but that “erratic” behaviour had created challenges. It said that the firm was putting in place changes to prevent such problems from happening in the future.