The losses continue to mount for Adidas as a result of their terminated partnership with Kanye West.
On Friday (May 5), the company posted its first-quarter fiscal report, which reveals the shoe giant had $661 million in lost sales following its split with the controversial Yeezy creator, resulting in a total $565 million net loss. Adidas is looking at a potential operating loss of $771 million in 2023, due largely in part to the $551 million hit the Three Strips could take if it doesn’t off its current Yeezy inventory.
“The adverse Yeezy impact and negative currency developments weighed on the gross margin development,” Adidas CEO Bjørn Gulden said in the report. “This could not be offset by the significant positive effect from the price increases the company has implemented…Should the company irrevocably decide not to repurpose any of the existing Yeezy product going forward, this would result in the potential write-off of the existing Yeezy inventory and would lower the company’s operating profit by an additional [$551] million this year.”
Back in March, it was reported Adidas is sitting on $1.3 billion worth of Yeezy product, which is sitting in warehouses. That news came just days after Adidas revealed it is projected to take its first loss in three decades due to the split with Ye.
Adidas cut ties with Kanye West last October following several anti-Semitic remarks made by the rapper. Adidas isn’t the only one taking a loss in this situation. Kanye West’s net worth has reportedly been obliterated by the lost deal, which has reportedly knocked him out of billionaire status.
See Companies That Have Cut Ties With Kanye West
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