The termination of Adidas’ partnership with the artist previously recognized as Kanye West, and the challenge of selling his highly sought-after Yeezy footwear, contributed to the decline in earnings at the close of last year, resulting in a net loss of 513 million euros ($540 million), NPR reported.
According to the German shoe and sportswear manufacturer, the loss incurred in the fourth quarter was due to increased supply costs and declining revenue in China, in addition to the termination of the partnership with Kanye West and lower sales of Yeezy shoes. The loss of 513 million euros ($540 million) in the fourth quarter stands in stark contrast to the profit of 213 million euros recorded in the same period the previous year.
Adidas anticipates that further losses may occur, as the company estimates a potential 500 million-euro impact on earnings this year if it chooses not to reutilize the existing Yeezy inventory. Additionally, the company has projected an operating loss of 700 million euros for 2023, as reported by NPR.
Following the rapper’s antisemitic comments on social media and in interviews, Adidas parted ways with Ye in October, as did other brands under similar pressure. The company is currently facing the challenge of replacing its flagship Yeezy line, which industry analysts have estimated to account for up to 15% of its net income.
Written by staff