Sportswear giant could lose over $1 billion after cutting ties with controversial rapper
Adidas’ decision to end its partnership with rapper Kanye West could push the sportswear company’s operating losses to more than $1 billion in lost revenue, its chief executive said.
The clothing giant announced in October that it would not continue its nine-year relationship with West after posting a series of anti-Semitic statements on social media.
In a statement on Thursday, Adidas said its financial planning for the coming year reflects “significant negative impact of non-sale of existing stock“if he can’t”sell or reuse” remnants of his ‘Yeezy’ collection. Not selling the shares could cost the company up to $534 million in lost profits.
“The numbers speak for themselvessaid Adidas CEO Bjorn Gulden, who joined the company in January from rival sportswear brand Puma. “We are currently not operating as we should.” He also said he expects “one-time feeof $213 million due to a “strategic reviewof the company.
The company also said it expects sales to decline this year by a high single-digit margin. Shares of Adidas lost 11% of their value on Friday after announcing that it would end the year with a financial loss for the first time in three decades. These factors have contributed to the company’s revenue loss estimates potentially exceeding $1 billion for 2023.
West, who also goes by the name Ye, was let go by Adidas last October after making several remarks deemed anti-Semitic by the clothing brand. In December, he appeared on the InfoWars shows hosted by Alex Jones, where he made statements supporting Adolf Hitler and the Nazis. West had also previously said: “I can say anti-Semitic shit and Adidas can’t let me go.”
In addition to the West saga, Adidas has been facing other financial issues lately. In March, it announced it would close its Russian outlets and suspend online stores after the outbreak of conflict in Ukraine. It has also seen its business in China affected by the strict Covid lockdown practices introduced by Beijing.