Procurement has an “important role in finding innovative solutions” as Adidas considers what to do with millions of euros of Yeezy stock that was pulled from shelves amid controversy.

Adidas has Yeezy inventory worth €500m after terminating its relationship with Kanye West in October after the rapper made a series of antisemitic comments.

Adidas said not selling the stock would lower revenues by around €1.2bn, and would hit operating profits by around €500m this year.

Ben Muis, consultant and director at fashion consultancy firm Conceptable, told Supply Management this left with procurement a “chance to lead the way” to find a “positive outcome”.

He said: “Adidas's excess Yeezy inventory presents a unique procurement challenge that may be significantly hamstrung by either legal or moral constraints.

“However, by carefully considering the product's stage – whether it has already been received in a warehouse, is in transit, or is still in the manufacturing facilities – procurement teams may be able to play an important role in finding innovative solutions.

“Potential options include repurposing the inventory into different products, donating to overburdened aid organisations, or even recycling the materials into new products or options which provide potential marketing value such as surfaces for sports or playgrounds.

“With Adidas already producing trainers from ocean-recovered plastics, it is clear that the company has a history of finding innovative solutions to complex problems.

“Despite the complex factors at play, innovative procurement teams have a chance to lead the way in finding a somewhat positive outcome for this excess inventory.”

The German company said it was “reviewing future options for the utilization of its Yeezy inventory”, but it was considering writing off existing inventory.

Adidas said in a statement: “Should the company irrevocably decide not to repurpose any of the existing Yeezy products going forward, this would result in the write-off of the existing Yeezy inventory and would lower the company’s operating profit by an additional €500m this year.”

In its latest results Adidas said along with other cost pressures this could mean losses of €700m in 2023.

Bjørn Gulden, CEO of Adidas, said: “The numbers speak for themselves. We are currently not performing the way we should.”

In his first comments since taking over the role last month, Gulden continued: “2023 will be a year of transition to set the base to again be a growing and profitable company. We will put full focus on the consumer, our athletes, our retail partners and our adidas employees. Together we will work on creating brand heat, improve our product engine, better serve our distribution and assure that adidas is a great and fun place to work.

“Adidas has all the ingredients to be successful: a great brand, great people, fantastic partners and a global infrastructure second to none. We need to put the pieces back together again, but I am convinced that over time we will make adidas shine again. But we need some time.”

The news comes in a string of excess inventory problems faced by fashion brands following the pandemic. Rival sports brand Nike was left with excess inventories worth $9.7bn after factory closures in Asia, while Asos wrote off £100m of inventory due to inefficient supply chains and inventory management.

1. Describe the strategic procurement actions that Adidas could take to address the company’s excess inventory position.