In the event of heavy losses, Adidas may resort to the extreme action of setting fire to $500 million in unsold Yeezy items owned by Kanye West.
Many analysts estimate the product mass to be between $300 million and $500 million. According to the Financial Times, the firm may suffer profit losses of up to $1.3 billion this year as a result.
According to Wedbush analyst Tom Nikic, the Yeezy brand generates close to $2 billion in revenue per year, which is what makes it so extraordinary.
“The suddenness with which it occurred” and “the actually massive, significant component of (Adidas‘) business.”
The German shoe maker is already brainstorming solutions to their Yeezy stockpiling problem.
It was proposed that the merchandise be discounted, the shoes be rebranded, or even the sneakers be destroyed.
If the Yeezys are sold without a label, the business suggests dubbing them “dead Yeezys” and selling them at a discount.
“However, to be honest, that’s a risky notion,” Nikic told the newspaper.
It could work against them in terms of public relations. It would still look that they were working for financial advantage with someone who publicly professed antisemitism.
Adidas also considered product liquidation. Retail product liquidation is the process of shifting surplus inventory to warehouses, usually in developing countries, where it can be sold for pennies on the dollar.
“Almost everything you can imagine that is made in the world is sold somewhere, somehow, at some price,” Mark Cohen, director of retail studies at Columbia University, told the famous paper.
But, whether people respect Kanye West or not, these costly Kanye West sneakers will wind up on their feet; they simply want fresh, sparkling, current footwear.