Per NPR
Adidas lost $540 million after Q4 loss after split from Kanye West: Company struggles to sell Yeezy
3/9/2023
Adidas has struggled to sell Yeezy products since its split with Kanye West, leading to a net loss of $540 million. The fourth-quarter loss contrasted with the company's $225 million profits in Q4 a year ago.
The company expects to incur over a $740 million operating loss in 2023. This comes as the company has been struggling to sell its remaining Yeezy stock after the split of Ye in October.
Analysts estimate that Yeezy was responsible for at least 15% of Adidas' net income. Bjorn Gulden, the company's CEO, gave a statement saying this year would be a transition year and that they will start seeing profits again in 2024.
The company shared that it would see a revenue drop in China, estimated at around 50%. Adidas cited another reason for its performance drop: higher supply and shipping costs.
The company also expects a loss of $527.5 million in earnings this 2023 should it decide not to repurpose the remaining Yeezy stock it has in its inventory. Gulden gave a statement, as seen on Hypebeast, sharing how they need to reduce inventories and lower discounts.
Guldan: “We need to reduce inventories and lower discounts. We can then start to build a profitable business again in 2024. Adidas has all the ingredients to be successful. But we need to put our focus back on our core: product, consumers, retail partners, and athletes.”
In late October, Adidas officially ended its partnership with Ye, expecting just $246.5 million short-term negative effect on the company's full-year net income. The Yeezy partnership was estimated to be between $993 million and $1.49 billion in annual sales.
On October 25, Ye reportedly lost his billionaire status, as his multi-year Adidas partnership was estimated to be valued at $1.5 billion. After the end of his partnership, the rapper's net worth dropped to just $400 million.
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Other News:
- Adidas Ends Partnership with 'Ye' Kanye West Expecting a $246.5M Short-Term Negative Effect on Full-Year Net Income
- Kanye West is no longer a billionaire
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