Adidas reports heavy loss, post Kanye West fallout

German footwear brand Adidas’ underwent heavy losses estimated up to 513 M euros, after its split-up with Hip-hop magnate Ye, formerly Kanye West.

The year, which CEO Gulden called “a transition year” has now predicted a 2023 operating loss of nearly $750 m. According to Reuters, the company is now grappling to find any means to replace its banner Yeezy line, which according to analysts amounted to as much as 15% of its net income. The line, in 2023, generated 750 million euros in revenue, resulting in a 300 million profit.

The company anticipated a sales decline in North America due to high inventories. Gulden, according to his statement, is now focused on selling off the existing Yeezy inventory which he said has been brought down 1.5 billion euros in 2023, staging a 24% decline; and boosting popular products like Samba and Gazelle.

The sales in North America are still anticipated to see a fall by around 5% this year. The company had its hopes high for the upcoming year, expecting a growth of at least 10% in the second half. It is expected that there will be robust recovery in China, with sales growing at a double-digit rate.

The fall-out, after the hit ten-year-old partnership was triggered by Ye’s antisemitic remarks, leading to extreme backlash which made big brands and his own talent management team sever ties with him, though Ye seemed confident about Adidas not taking such a step. In an official statement, the company had called Ye’s statements “unacceptable, hateful and dangerous.” This year, the company allocated 140 million euros for donations to charities combating Antisemitism and racism.

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