Adidas - (ADDYY) has a solution to its nearly yearlong dilemma.
The German sports brand was sitting on more than a billion dollars worth of unsold sneakers that it has in stock due to the sudden end of its partnership with rapper Kanye West.
But on Thursday, Adidas CEO Bjørn Gulden announced that the company will resume selling the remaining stock of West’s Yeezy line and donate its proceeds to charity.
DON’T MISS: Adidas Backs Down on a Controversial Issue
“What we are trying to do now over time is to sell parts of this inventory and donate money to the organizations that are helping us and that were also hurt by Kanye’s statements,” Mr. Gulden said during Adidas’ annual shareholder meeting.
Adidas ended its partnership with West in October after the rapper, who now goes by Ye, had made anti-semitic remarks on social media. But it has faced some financial struggles since the termination of its contract with West, whose line accounted for nearly 10% of Adidas’ annual revenue.
The company considered several options on what to do with the stock, including destroying it, which it said would’ve cost them nearly $550 million. It had already announced last week that the loss of Yeezy had cost them $441 million in sales seven months after making the swift decision to terminate its partnership with West.
Adidas has already said it will turn its focus on reestablishing itself as a sports brand by focusing on basketball and soccer.
“We want to double down on all of the things that are U.S.-centric, particularly around sport,” Adidas North America President Rupert Campbell told the Wall Street Journal last month.
