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CNN
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Adidas’ split with Ye, formerly known as Kanye West, was an expensive one.
The company warned on Thursday that it expects to lose $1.3 billion (€1.2 billion) in revenue this year because it can’t sell designer Yeezy clothing and shoes. Adidas ended a 9-year partnership with the rapper last October because Comment on your Jewish post.
In a statement, Adidas said its financial guidance for 2023 “takes into account the significant adverse impact from not selling existing inventory”. If the company cannot “ReuseAny remaining clothing from Ye, Adidas said could cost the company $534 million (€500 million) in operating profit this year.
The company said shortly after the partnership was dissolved that it would attempt to sell clothing, stripped of Yeezy’s name and trademark. Adidas said selling the sneakers under its own label would save the company about $300 million in royalties and marketing fees.
Despite that effort, Adidas will have problems repurposing its clothing, an analyst previously told CNN.
“There are really no good options for this struggling brand that sits somewhere in the middle of nowhere,” said Burt Flickinger, retail expert and managing director of retail consulting firm Strategy Resource Group. prestige and luxury.
Other options include destroying it or giving away unsold Yeezy clothing.
Adidas said it also expected a “one-time cost” of $213 million (€200 million) due to a “strategic review” the company is currently conducting.
“The numbers speak for themselves. Adidas CEO Bjørn Gulden said at the moment we are not operating the way we should. declare. He is known as the company’s top leader in January and join from rival Puma.
Adidas said last year that it was ending its partnership with Ye because it “does not tolerate anti-Semitism and any other type of hate speech” and said his comments It is “unacceptable, obnoxious and dangerous”. Adidas said it violated the company’s “values of diversity and inclusion, mutual respect and fairness”.
Last fall, Adidas launched a “partnership under consideration” after Ye wore a “White Lives Matter” t-shirt in public. The Anti-Defamation League classifies the phrase as a “hate slogan” used by white supremacist groups, including the Ku Klux Klan. He also said “I can say that anti-Semitic bastards and Adidas can’t leave me,” in an attack against Jews on a podcast.
Adidas did not address potential problems with the Beyoncé-led Ivy Park brand. The The Wall Street Journal reported this week that the once streetwear brand’s sales fell 50% last year to about $40 million — well below an internal forecast of $250 million. The partnership is “strong and successful,” Adidas told the Journal in response.
Adidas stock
(ADDITIONAL) nearly 10% off in the Frankfurt trade. adidas
(ADDITIONAL) The stock has fallen 45% over the past year.
