When Adidas and Kanye West divorce, it’s the finances that toast. The German equipment manufacturer has announced that it expects to lose 700 million euros in 2023. And this because of its breach of contract in October with the American celebrity, following his numerous anti-Semitic statements. Adidas’ net profit has already fallen to 254 million euros, compared to 1.49 billion euros in 2021. The firm had not experienced a loss in a year for thirty-one years. “The numbers speak for themselves. We don’t have the results we should have had, explained the new boss of the multinational, Bjorn Gulden, in office since January. Adidas has everything it takes to succeed… We need to put this all back together, but I am convinced that over time Adidas will be able to shine once more.” he concluded.
“Weeks of deliberations within the company”
While waiting to redo the icing, Adidas must think regarding how to put an end to its dependence on Yeezy. “Adidas was calling Yeezy one of the most popular in the history of the industry, and it took weeks of deliberations within the company before finally ending the partnership,” detailed TIME Magazine. Last year alone, Yeezy accounted for around 10% of the three-stripes brand’s annual revenue. According to many observers and streetwear enthusiasts, this partnership even allowed Adidas to hold its own once morest Nike, the leader in the sector. His foal, Michael Jordan, reporting $3 million…every five hours. In 1984, before the basketball player became a cultural icon, he dreamed of being sponsored by Adidas… which then had a turnover 50% higher than its competitor. The trend has since reversed markedly.
Win back US, European and Chinese customers
Bjorn Gulden, formerly head of Puma for ten years, will be tasked with winning back US, European and Chinese customers. All in a context of a global drop in demand for sneakers, which is pushing Adidas to reduce its production rates by 30 to 40% during the year 2023. The CEO will also have to decide whether Adidas should sell or reuse the designs of their collab with Yeezy knowing that they own all design rights to the product, but the brand name belongs to Kanye West.
