Foot Locker refuses to sell Yeezys for fear of backlash
According to one report, Foot Locker refused to stock surplus Yeezys because the company feared backlash from the controversial rapper’s discontinued brand.
The athletic footwear giant was among retailers Adidas helped sell its remaining Yeezy inventory following its ill-fated partnership with the rapper formerly known as Kanye West, Complex reported.
However, Foot Locker executives changed their minds over concerns that the collaboration with Ye, who was ousted from the lucrative partnership with Adidas in October following a spate of anti-Semitic and other abusive remarks, would become one PR nightmare, an unnamed source told the outlet.
Adidas has sold its remaining Yeezy products and donated a significant portion of sales to five organizations fighting racism and anti-Semitism, including the Anti-Defamation League and the Philonise & Keeta Floyd Institute for Social Change, founded by George Floyd’s brother.
The donation could reportedly exceed $9 million, but a final decision has not yet been made.
Foot Locker hasn’t been able to incorporate a charity aspect into the sale of Yeezys, sources told Complex.
Foot Locker did not respond to the Post’s request for comment.
Adidas balked at what to do with its unsold Yeezy sneakers, even considering destroying up to $500 million worth of inventory earlier this year.
Experts warned against the step.
While it’s relatively common for brands to incinerate their unsold product, this was seen as the “worst outcome” as it would generate no revenue and could lead to backlash over waste and environmental costs.
The German sportswear giant eventually chose to sell the product in batches with a charity component, showing that it doesn’t support Yes’s outbursts of shock about Jewish people.
The first batch of 4 million Yeezys went on sale in June and sold out in 48 hours.
Sources told the Financial Times that the demand for the shoes was surprisingly high – so great that Adidas could not fulfill all orders.
The multi-million dollar sell-off means the company likely won’t have to take a large write-down of its remaining shares.
They reportedly get royalties for the sale, but the amount is unclear.
Forbes estimated that Ye made $220 million annually through the partnership, which began in 2019.
Proceeds from the sale will also be used to pay for costs associated with terminating the partnership, including legal fees, closure of manufacturing capacity and layoffs.
By 2019, Yeezy’s annual sales surpassed $1 billion, which caused Ye’s net worth to skyrocket.
However, Ye dropped out of the billionaire ranks after a series of public crises prompted Adidas to cut ties.
Though excess Yeezy inventory hurt the company’s profit in the first quarter of this year, the profitable sell-off fueled positive second-quarter results.
“Adidas benefited from the initial sale of some of its Yeezy inventory in the second quarter,” the company said said in his earnings report earlier this month.
Adidas reported $193 million in operating income for the quarter, which the company attributed to about $175 million “related to one-time costs, donations and provisions for future donations,” likely related to the Yeezy sell-off.
