Adidas to sell Yeezy shoes and donate some of the proceeds

Adidas is to sell its stock of unsold Yeezy shoes and donate some of the proceeds to charity, as the sports brand seeks to mitigate the financial and reputational damage related to its ill-fated partnership with US rapper and fashion designer Kanye West.

Responding to investors chiding Adidas for the delays in finding a solution for the Yeezy stock, chief executive Björn Gulden said the group had decided against destroying the shoes. Instead, it will over time “try to sell parts of the product” and donate some of the money to charities representing people who “were hurt” by West’s comments, he added.

“Burning several million pairs [of shoes] does not make sense,” Gulden told investors attending the company’s annual meeting on Thursday. He previously said that selling the remaining Yeezy stock would imply that West would receive additional payments from Adidas, saying in March that the company needed “to pay royalties, of course”.

Gulden on Thursday did not name specific charities and did not clarify whether Adidas was planning to donate all the proceeds from the sales. In March he had said that the company would “probably not make profit” on the remaining stock.

The German brand stopped selling Yeezy shoes in October and terminated its partnership with West — now known as Ye — after he made antisemitic remarks.

The move wiped out €1.2bn in annual revenue and €500mn in operating profit. Adidas earlier warned that destroying its remaining stock in Yeezy shoes would create the need to write off another €500mn. The unsold stock has a market value of more than €1bn, Gulden told investors at the group’s annual shareholder meeting.

Adidas responded to investors’ pressure to disclose the results of an internal investigation into the affair that was launched after employees accused the company in an anonymous letter of turning a blind eye to West’s inappropriate behaviour.

Chief financial officer Harm Ohlmeyer said on Thursday that senior management learned about the allegations hours before Rolling Stone magazine reported them. The investigation — conducted by a law firm that interviewed two dozen current and former employees — did not confirm the gravest allegations raised by employees, according to Ohlmeyer.

The only incident found in the probe was one that West himself had documented in a YouTube video, he said. Adidas could neither back up allegations that West showed an intimate picture of his ex-wife Kim Kardashian in job interviews, nor that he made antisemitic remarks in the presence of Adidas employees or harassed women, he added.

However, the investigation uncovered “partially inappropriate behaviour” by West, which Ohlmeyer did not detail. Adidas is evaluating ways to “improve the management of Adidas partnerships and to minimise the risk of inappropriate behaviour by partners and unacceptable working conditions”, he added.

Josef Schuster, president of the Central Council of Jews in Germany, told the Financial Times that Adidas’s willingness to donate some money had to be “highly appreciated”, but said it was “very problematic” that West was going to have financial gains from further Yeezy sales. “From my perspective, the wrong party [Adidas] is going to be punished here,” Schuster added.

Shares in the group were up 2.2 per cent in midday trading on Thursday.