What happens to unsold Yeezy merchandise? Destroy it, rebrand it, export it

New York
CNNBusiness
 — 

Yeezy merchandise has no place to go.

Retailers are dumping it. Resellers are blocking new product listings associated with it. Even off-price outlets like TJ Maxx don’t want any goods associated with hate-speaker Kanye West, the embattled rapper who has legally changed his name to Ye.

So where will the mounting glut of Yeezy products — sneakers, sweatshirts, sweatpants, jackets, T-shirts, bags — wind up?

Industry analysts suggest three outcomes: It will be rebranded, exported for donation or sale in secondary markets or destroyed.

In other words, Yeezy might be headed to landfills.

It’s a dramatic fall from grace for a once highly-coveted label, especially the Yeezy-branded sneakers that commanded thousands of dollars on the resale market.

“There really are no good options for this distressed brand that sat somewhere between prestige and luxury,” said Burt Flickinger, retail expert and managing director at retail consultancy Strategic Resource Group.

Adidas, Gap Inc. Foot Locker and The RealReal are among a growing list of companies that have announced they will no longer sell Yeezy merchandise, and some pulled existing Yeezy product from their stores and online channels this week after West made a series of antisemitic remarks.

Morningstar analyst David Swartz said Gap will probably have to destroy or otherwise dispose of — perhaps through donations — its unsold Yeezy merchandise.

“Gap has stated that it will not sell the remaining items,” said Swartz. “Adidas will probably release some products already in the pipeline under its own name … and it will probably be stuck with destroying some merchandise as well. Adidas has stated that it will not pay any more royalties to Yeezy.”

Gap and Foot Locker did not provide comments for this story.

Offloading the merchandise into the domestic discount channel probably won’t work, either. TJ Maxx, a major player in the discount space, stated it will not buy any Yeezy products to sell in its stores.

The options for dealing with unsold Yeezy gear pose big challenges.

There’s the environmental impact of destroying or disposing of unsold merchandise. Making clothing and other apparel already comes at a high environmental cost because of the resulting green house gas emissions, significant water use, water pollution and textile waste. Typical methods for destroy unwanted clothing — such as using incinerators — only compounds the problem.

“The unfortunate reality is that vast amounts of usable clothing are destroyed every year,” Swartz said.

GoTRG is a product returns management company that processes over 100 million distressed, unsold, or returned items annually for manufacturers, online retailers and big-box chains. And they’re anticipating a fallout against the Yeezy brand even in secondary markets.

“Companies like ours that run secondary marketplaces are going to be just as reluctant to sell products associated with Ye’s brands as the retailers currently are,” said Sender Shamiss, CEO of goTRG “A big portion of this product will likely end up in donation bins, recycling bins, or landfills.”

Rebranding merchandise to camouflage the controversy is another common industry tactic, experts say. It involves removing the distressed brand’s logo, or disguising it in some way.

Given that Yeezy products are so distinctive in their style and design, rebranding them might not work, Flickinger said.

The most likely destination for the unwanted Yeezy products could be overseas markets.

When it comes to problematic merchandise, sending it oversees to countries based on need and where durability of product matters more than the brand or fashion, is an industry fallback.

“Exporting it looks to be the last and final best solution to make Yeezy products disappear,” said Flickinger.