Adidas Chooses to Sell Remaining Yeezy Inventory at Cost, Shuns Write-Offs

In a strategic move to recover losses, Adidas declared on Wednesday that it will not write off the bulk of its unsold Yeezy inventory, opting instead to sell the remaining shoes at least at the cost it paid for them. This decision follows the company's separation from rapper Ye, formerly known as Kanye West, due to a series of antisemitic remarks.

Initially contemplating a write-off of approximately 300 million euros ($325 million) for the unsold Yeezy stock, Adidas managed to turn the tide, reporting an operating profit of 268 million euros in 2023. This unexpected success is attributed to the fourth quarter's better-than-expected operational business and the resolution to sell the majority of the remaining Yeezy inventory.

CEO Bjørn Gulden emphasized the company's consumer research, indicating confidence in selling the remaining Yeezy products in 2024 at least at the cost price. The decision entails a minimal write-off for damaged or broken inventory. Notably, Adidas had previously sold 750 million euros worth of Yeezy merchandise in 2023, with proceeds benefitting organizations like the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change.

While it remains uncertain if Adidas will donate a portion of the forthcoming Yeezy sales, the company affirmed that no assumed profit contribution from Yeezy is anticipated in fiscal 2024.