The financial breakup between Adidas and embattled rapper Kanye West could reportedly have a nine-figure price tag.
Within this process, the German sportswear company is also pondering the notion of "literally burning" approximately $500 million worth of Kanye-related sneakers.
Back in 2015, Adidas partnered with West — now legally known as "Ye" — on the "Yeezy Adidas" apparel line.
According to reports, in the early years, the West signature line raked in more than $1 billion in annual sales for the Yeezy sneakers, and nearly $2 billion for the overall merchandise.
The Adidas-West partnership, however, soured last year, after Ye posted a number of racially charged messages and memes online. This prompted Adidas to cut company ties with West — even though it still has a lot of unsold merchandise in stock.
According to The Washington Post, Adidas has deemed its $500 million stockpile of Yeezy sneakers to be unsellable to the general public — on "a scale unseen in the fashion industry."
Among Adidas' options for the remaining Yeezy sneakers:
- Rebranding the shoes.
- Selling the sneakers at a discount, down from the original price range of $200-$600.
- Removing the labels, thus making the shoes "zombie Yeezys," according to one industry insider.
- The company "literally burning" the Yeezy sneakers, according to Robb Report's Tori Latham. That option would subsequently result in a maximum financial hit "with zero sales and only the tax write-off."
The fourth option, according to Latham, would be an "unsavory choice ... that comes with loads of negative attention, given the ethical and environmental questions involved in setting millions of dollars' worth of goods on fire for no real reason."
Aside from burning expensive merchandise, the Post reports the Adidas-Kanye West breakup could have some legal and public relations entanglements.
The only safe PR move would involve Adidas donating the Yeezy shoes to areas in Syria and Turkey that were devastated by recent earthquakes.
A strategic decision, however, isn't likely to come from Adidas for a few months, according to reports.
As Newsmax chronicled in October, the $1.5 billion value of the Adidas deal jump-started Ye and his brand.
However, without Adidas' backing, West's net worth dropped to roughly $400 million.
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