Adidas made a lot of money thanks to Kanye West and his Yeezy brand. Ultimately, Ye was able to transform Adidas into one of the world's most trendy athletic companies.
After years of stagnation, Yeezy propelled Adidas to the spot from which they outsold Jordan Brand. All of that has started changing now that Kanye is no longer involved with the label.
Yet, Adidas has had a major financial impact. According to many sources, the German firm is hoarding $530 million worth of Yeezys.
Furthermore, these Yeezys still bear the Yeezy label, which implies they cannot be sold without Ye's permission. Only a few weeks ago, speculations arose that both parties had agreed to sell these sneakers. It, however, did not result in anything.
Adidas, according to CNBC, is expecting massive losses. Its fourth-quarter results reflect an operating deficit of around $760 million.
This includes a net loss of around $500 million. Dividends for stockholders are expected to fall from $3.50 to $0.80, which is not a positive indication. Finally, Adidas expects net operating losses of $700 million this year. The last time the brand lost money was around 31 years ago.
Therefore, this is a poor indicator for Adidas, and they will need to devise a plan of attack. The sportswear and footwear game may be challenging, as it is all about trends and image. If Adidas cannot demonstrate that it is still a hip mark, it may face an exceedingly difficult road.
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