Adidas CEO Speaks On the $1.3 Billion USD YEEZY Inventory Dilemma

In an earnings call on Wednesday, adidas CEO Bjørn Gulden talked openly to analysts about the big question currently hanging over the company, what to do with the leftover YEEZY inventory reportedly valued at roughly $1.3 billion USD.

Destroying the stockpile would be a massive hit on the company’s balance sheet and bad for the environment, selling it may cause severe backlash to the company’s reputation, and donating the shoes comes with its own complications when its high resale value is taken into consideration.

“The people that are saying send the shoes to Turkey or somewhere where people don’t have shoes or there has been a tragedy happening, I think you agree that these are not normal shoes,” said Gulden. “The value of the product is not the physical value of the ingredients. It’s a brand and merchandise that is sold at a high price.”

Another option would be to sell the stock to a third-party buyer, an option that is plausible but comes with reputational risks.

“I can tell you since I started here, I probably got 500 different business proposals from people who would like to buy the inventory,” said Gulden. “But again, that will not necessarily be the right thing to do.”

With the termination of its Yeezy partnership, growing competition in the Chinese market, and shrinking consumer demand in Western countries, adidas sees 2023 as a rebuilding year as it looks to reignite its brand. With potentially more than a billion dollars USD on the line and its strategy in limbo, adidas is understandably taking its time to make a decision on the future of the YEEZY stock.

“If you can’t sell and you can’t destroy, what’s your option?” said Gulden. “That’s why we haven’t made a decision on it, because it’s a very complicated issue.”

Putting the controversy and drama surrounding the fallout aside, Gulden praised Ye for his creative genius.

“If you look at that business, there’s no doubt that [Ye] is one of the most creative people that has ever been on the planet,” said Gulden. “I think the way this was taken to market is probably the best go-to-market job that any brand has done and it’s very sad that this is falling apart.”

Looking forward, adidas looks to capitalize on the attention around its classic silhouettes such as the Samba, Gazelle, and Spezial.

“We currently have maybe the hottest shoe in the market and it’s the Adidas Samba,” said Gulden. “You have seen it for a while, I would say, in fashion shows and also on celebrities that have actually bought the shoes themselves. It’s hot in Asia, hot in Latin America, hot in Europe, and in America, and I can’t remember the last time I saw that. So look for the Samba, look for the Gazelle, and ironically also the Spezial, which was actually a handball shoe that even I used when I was playing, which probably tells you how old I’m getting.”

In other news, here’s a first look at the COMME des GARÇONS x Salomon FW23 footwear.