The business partnership between Kanye West and Adidas is finally on its way to being completely and permanently severed. As you no doubt know, the relationship between the rapper and the apparel giant was destroyed in the wake of West's spate of anti-Semitic remarks last year.
When Adidas canceled the partnership, roughly $1.4 billion worth of unsold Yeezy merchandise was left in limbo. That merchandise has sat in storage for months while Adidas scrambled to figuer out what to do. For a moment the company considered destroying it all.
After months of internal debate, Adidas just announced it is preparing to sell off its vault full of excess unsold Yeezy products entirely. Adidas expects their loss on the merch to drop from $1.4 billion to around $700 million. A portion of the proceeds will go to charity, though it's unclear how much.
Kanye will also benefit from the sale.
Thanks to a previously-established 15% commission structure, if Adidas sells the merch for the predicted $700 million value, Kanye would earn around…
$100 million
(Photo by Jonathan Leibson/Getty Images for ADIDAS)
The news comes as Adidas is facing some of its worst financial figures (and its first posted annual loss) in 30 years, widely credited to its having discontinued sales of Yeezy products. West might be too radioactive for the fashion world but the market for the Yeezy shoes he designed is still responsive and they continue to sell well on the secondary market.
According to Bjoern Gulden, chief executive of Adidas, that secondary resell market is why the company decided to hold on to its estimated $1.3 billion in Yeezy stock rather than sell or donate it. But now it appears to be looking for a way to sell it:
"What we are trying to do now over time is to sell some of this merchandise… burning the goods would not be a solution."
"As difficult as he was, he is perhaps the most creative mind in our industry," Gulden said about West.
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