Adidas: First loss in 30 years on Kanye

Henry

Adidas reported its first loss in more than three decades on Wednesday due to the termination of its partnership with US rapper Kanye West (now formally known as Ye).

Adidas and West co-designed the popular Yeezy sneaker line. However, the partnership ended in 2022 after West sparked a storm with a series of anti-Semitic social media posts.

The collapse of the partnership deprived the company of an important revenue stream and saddled Adidas with a massive inventory of unsold shoes.

Adidas recorded a loss of €75 million in 2023, after a profit of €612 million in 2022. According to Adidas, this was the company’s first net loss since 1992.

However, Bjorn Gulden, who came over from rival brand Puma to lead Adidas shortly after the Kanye debacle, is not too worried about the loss.

“Although it will take a long time to really turn things around, it builds a base to achieve what we promised.”

Adidas predicts an increase in business for 2024, although sales may only grow by single digits. The brand does expect operating profit to reach around €500 million, double the figure for 2023.

With the European football championship in June and July hosted by Germany and the Olympics shortly after in Paris, Adidas is expected to benefit from higher sales of jerseys and related items.