The sports clothing and footwear manufacturer Adidas recorded a net loss of 14 million euros for the first time since 1992 at the end of last year. The company also recorded a net loss from continuing operations of 58 million euros, data that is reflected in the German manufacturer’s financial report.
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The document notes that the key factor in the losses was the behavior of the company’s former partner, rapper Ye (Kanye West), with whom Adidas terminated the agreement at the end of 2022 due to his provocative anti-Semitic statements.
In March of last year, the manufacturer reported that items co-branded Yeezy with West had piled up in warehouses. After refusing to work with the rapper, the company removed the line from sale. According to the WSJ, $1.3 billion worth of sneakers were stored in warehouses in May 2023 and Kanye himself is no longer a billionaire.
The company estimates that the withdrawal of the partnership contributed to a loss of potential revenue of €500 million.
Last spring, Adidas CEO Bjarne Gulden warned that the year would be difficult for the company.
“The current 2023 will be a transition year to create a reserve for 2024 and 2025, we need to reduce inventories and reduce discounts,” he said then.
The company expected that operating losses could reach 700 million euros, but the manufacturer corrected the situation and closed 2023 with an operating profit of 268 million euros, a figure that it expects to double this year.
Adidas will sell the remaining Yeezy products at cost.
Author:
Natalia Gormaleva
Source: RB
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