Adidas will sell some of the merchandise from its defunct Yeezy partnership with rapper Kanye West and donate part of the proceeds to international organizations, CEO Bjoern Gulden said on Thursday.
The German sportswear giant has been in a predicament over the Yeezy stock since it cut ties with West over his
anti-Semitic comments late last year, with the controversy weighing on its stock and hitting its bottom line.
Millions of Yeezy brand shoes with a retail value of 1.2 billion euros ($1.3 billion) are sitting in storage after their
sale was put on hold.
Their value in the resale market has rocketed since Adidas stopped producing them, with some models more than doubling in price.
Addressing investors in the southern German town of Fuerth after the debacle contributed to the company's first annual loss in 31 years, Gulden said it had yet to be determined when and how the planned sale would proceed.
"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, adding the proceeds would be donated to international organizations that West, who changed his name to Ye in 2021, had harmed with his comments.
Shares in Adidas were up 2.2% at 1000 GMT, Reuters reported.
"It's a smart and responsible move," said Ed Stoner, a sportswear industry consultant who previously worked at Adidas, adding it "not only preserves the brand's integrity but avoids a sustainability crisis."
By selling some of the stock, the company is potentially minimizing a $700 million loss this year, but it is unclear how much stock will be sold and what proportion of the proceeds will be donated.
If the goods are sold, Ye will be entitled to previously-agreed commissions - 15% of turnover, according to media reports. Adidas has declined to comment on this.
Gulden defended Adidas' years-long collaboration with the rapper, saying that "as difficult as he was, he is perhaps the most creative mind in our industry".