The CEO of Adidas announced at the annual general meeting that he wanted to sell the Yeezy products that were still in stock.
(Photo: dpa)
Munich In the scandal surrounding US rapper Kanye West, sporting goods manufacturer Adidas will probably sell the “Yeezy” shoes from the joint collection that are still in stock. “Burning several million pairs of shoes cannot be the solution,” said CEO Björn Gulden at the annual general meeting on Thursday. He indicated that he intends to donate part of the proceeds.
Adidas ended its collaboration with the artist last year after West’s anti-Semitic statements and other incidents. Since then, Yeezy goods with a sales value of more than one billion euros have been in the warehouses.
“When and how” the shoes will be sold over time has not yet been decided, said Gulden.
Investors sharply criticized the Adidas Group’s handling of the scandal. “Adidas can only make the urgently needed new start with relentless and transparent clarification,” said fund manager Janne Werning from Union Investment.
Did Adidas managers know about allegations against Kanye West in the past?
Adidas missed all goals last year due to the separation from West and slumps in sales in China. CEO Kasper Rorsted had to go – and received a severance payment of twelve million euros and other payments for a year and a half non-compete clause.
The former Adidas boss had to leave after a slump in sales.
(Photo: dpa)
The separation from West was the dominant topic at the shareholders’ meeting. In good times, the “Yeezy” collection brought Adidas sales of well over a billion euros a year. West, who now calls himself Ye, is “perhaps the most creative person who has worked in our industry,” said Gulden.
But the cooperation had become intolerable after various failures by West. The group has launched an investigation into allegations that Adidas managers learned of West’s past activities, but did nothing to stop it. According to an anonymous letter, which is said to have come from among the employees, West is said to have shown porn at meetings.
Adidas removed the products from the cooperation with US rapper Kanye West from the program in October. Now the stored products are to be sold off.
(Photo: AP)
Investors asked Adidas to release the results of the internal investigation. “As shareholders, we have a right to know this here and now, after all we own the company and have suffered the financial damage of the Yeezy debacle,” said fund manager Werning.
US investors have filed a lawsuit
Adidas has to be prepared for a drop in sales this year because the “Yeezy” sales are missing. Investors in the USA have also filed suit against Adidas. The group had known about the rapper’s problematic behavior for years, but only ended the cooperation last October – and did not take sufficient precautions to limit financial losses, so the accusation.
Last year’s balance sheet also drew a lot of criticism. “Investors are faced with a pile of rubble that cannot be cleaned up so quickly,” said Ingo Speich from the fund company Deka. The supervisory board bears a great deal of responsibility: “The board acted much too late.”
The disgruntled shareholders Union Investment and Deka then refused to discharge the supervisory board and the old group management. On the other hand, they supported the new CEO Gulden. “We welcome the signing of Björn Gulden,” said Speich. He must now “quickly bring Adidas back to profitable growth, polish the three stripes again and put the brand in the right light for customers”.
Last year, the group’s revenues rose much weaker than forecast by only one percent to 22.5 billion euros. The competition also developed much better at the start of the new year: Adidas sales stagnated in the first quarter at 5.3 billion euros. The bottom line was a small loss.
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