Losing Kanye West may confirm to be far more expensive than Adidas anticipated.
Adidas presented a fiscal prediction statement for 2023 on Thursday (Feb. 9), revealing that not selling existing Yeezy stock will cost the business $1.3 billion in the coming months. Their operational profit might be reduced by up to $534 million.
Adidas ended its collaboration with Kanye West in October of last year, following the controversial rapper's anti-Semitic statements.
According to Adidas, the split originally cost them more than $250 million in profit and $500 million in lost revenue, but they claimed they would save $300 million in marketing expenses and royalty payments to Ye.
"Adidas does not tolerate antisemitism and any other sort of hate speech. Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness," the company said in a statement. "After a thorough review, the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products and stop all payments to Ye and his companies. Adidas will stop the Adidas Yeezy business with immediate effect."
The statement continued: "This is expected to have a short-term negative impact of up to €250 million on the company’s net income in 2022 given the high seasonality of the fourth quarter. Adidas is the sole owner of all design rights to existing products as well as previous and new colorways under the partnership. More information will be given as part of the company’s upcoming Q3 earnings announcement on November 9, 2022."
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