Adidas now has a similar dilemma with its Yeezy line, observers say, except on a scale unseen in the fashion industry. Months after cutting ties with rapper and fashion designer Kanye West over his flagrant antisemitism, the German company on Feb. 9 warned it was looking at massive losses if it couldn’t sell its inventory, raising questions about its options for the now-tainted brand, including literally burning the shoes.
That’s a significant shift from its outlook in November, when officials said they could recoup the “vast majority” of losses by rebranding the distinctive shoes — which retail from roughly $200 to nearly $600 — and selling them at a discount.
The predicament offers a glimpse of what happens when a fashion line meets a sudden end. And experts say the decision, which Adidas has said is still months away, will be especially challenging because the company faces ethical and financial tripwires at every turn.
Newly installed CEO Bjørn Gulden signaled this month that the company might not sell any existing product, which analysts valued from $300 million to $500 million. The company said it could lose as much 1.2 billion euros ($1.3 billion) in revenue this year and 500 million euros in operating profit if it cannot repurpose the merchandise.
The company ended its relationship with the entertainer, who now goes by Ye, in late October following a string of controversies beginning with him appearing in a “White Lives Matter” T-shirt at his Paris Fashion Week show. Days later, he made antisemitic comments on Instagram and Twitter, and then doubled down on that rhetoric in a podcast and an unaired portion of an interview with Fox News host Tucker Carlson․