Adidas has warned that it could experience its first annual loss in 31 years, with the sportswear company projecting a full-year operating loss of 700 million euros, or $739 million, for 2023. The bad financial news comes after Adidas ended its lucrative partnership with Kanye West after the rapper and fashion mogul embarked on an anti-semitic media tour.
On Wednesday, Adidas said the majority of its projected losses for 2023 would come from remaining Yeezy products it is holding in inventory, which could end up costing the company 5o0 million euros.
Adidas was one of several companies to sever ties with West following his anti-semitic rants last year. The German company said at the time it doesn’t tolerate “antisemitism or any other sort of hate speech.”
“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,” Adidas said in a statement.
The termination helped push Adidas into the red for the fourth quarter. The company reported Wednesday a net loss of 513 million euros ($540 million), compared to 213 billion euros in profit for the same quarter a year ago.
Adidas also blamed a weakening Chinese market and higher supply costs for the quarterly loss.
CEO Bjorn Gulden said 2023 would be “a transition year” and expects the company to return to profitability in 2024.
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