Adidas said it might have to write off the remaining 300 million euros ($320 million) worth of Yeezy shoes left unsold after it cut ties with rapper Ye, formerly known as Kanye West. The company will decide in the coming weeks whether or not to do a third release of the shoes next year to generate more donations to groups fighting antisemitism.
The shoe and sports clothing company, which cut ties with Ye in October 2022 after he made antisemitic remarks online, has sold 750 million euros worth of the shoes in two stages earlier this year through Adidas smartphone apps and its website. Part of the profits went to groups like the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, run by social justice advocate Philonise Floyd, the brother of George Floyd.
That’s not usually the reason companies deliberately destroy inventory, and this has nothing to do with insurance. It’s a write-off, meaning they write the loss off on their taxes.
Retailers destroy inventory all the time, but it’s almost always to artificially keep scarcity high. Adidas would not be concerned with scarcity on these products because they have no intention to sell them in the future and are not interested in retaining the Yeezy brand.