Adidas Expects To Lose More Than $1 Billion In Sales As a Result Of Kanye West's Dropping - WhatsOnRap

Adidas could lose around 1.2 billion euros ($1.3 billion) in revenue in 2023 if it is unable to sell its existing Yeezy stock.

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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Adidas said in November that they want to sell Yeezy designs without the Yeezy brand. If they eventually decide not to,

"this would result in the write-off of the existing Yeezy inventory and would lower the company’s operating profit by an additional [$534] million this year," according to their latest statement. "In addition, adidas expects one-off costs of up to [$213] million in 2023. These costs are part of a strategic review the company is currently conducting aimed at reigniting profitable growth as of 2024."

Ye's bank account suffered as well as his reputation as a millionaire. He's since been looking for a new company to promote his brand.

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