Adidas Expecting First Annual Loss in Over 30 Years Due to Kanye West Fallout
German sportswear giant, Adidas reported a substantial fourth-quarter 2022 sales loss of $763 million and a stunning projection for 2023, following its split from Kanye West.
The brand expects a total operating loss of $738 million this year, its first annual loss in 31 years ago, according to CNBC.
This decline of Adidas is due to the end of it’s relationship with Kanye West in October 2022. After a series of anti-Semitic comments, Adidas parted ways with West and canceled its Yeezy clothing line. That reportedly left them with a $1.3 billion Yeezy stash.
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On the earnings call, CEO Bjorn Golden, who took over in January after leaving the same role at Puma, prepared the reports. Talk about how the company is negotiating between a few different options regarding the handling of its remaining Yeezy sneakers.
Whether it’s a profit-free sale in the original retail store, an immediate gift, or destruction, every decision has its advantages and disadvantages.
Selling would damage their reputation, a donation would propel them to the resale market rather than the less fortunate, and shredding/burning would raise sustainability concerns.
However, in terms of revenue, Golden has confirmed that 2023 will be the year of re-stabilization after Yeezy and the days of 2024 will be much better.
Given the turmoil that led to the loss of revenue, Golden took an honest look at the past few months and the entire Yeezy era. As they wait to solve their problems, it’s still hard to forget what could have been.