Adidas’ CEO, Kasper Rorsted, who previously held the same position at Puma, revealed that the company is still grappling with the complex issue of dealing with $1.3 billion worth of unsold footwear resulting from a previous collaboration with rapper Kanye West. Adidas terminated the deal with West in October after he made repeated antisemitic comments.
Rorsted considered various options, including selling the sneakers, which could yield over $500 million in profit, but would also carry significant reputational risk. Alternatively, destroying the shoes raised sustainability concerns and presented its own set of issues. Instead, Rorsted hinted that a philanthropic approach could be a viable solution, saying that Adidas aims to do something that would cause the least damage while also doing something good.
He added that Adidas had to navigate a difficult situation during the fallout with West, deciding whether to halt or continue production. Ultimately, Adidas chose to continue production out of concern for the factory workers. The various footwear components were then shipped to different locations and have only recently been prepared for sale.
Adidas reported an operating loss of $760 million and a net loss from continuing operations of $508 million. Looking ahead, Rorsted stated that 2023 will be a transition year to lay the groundwork for 2024 and 2025.