Adidas has again warned of a major impact to profits, potentially close to £500m, as a result of ending the company’s partnership with Kanye West last year.
Bjørn Gulden, Adidas’ new boss, said it could lose hundreds of millions of dollars by not selling its stock of Yeezy trainers.
The German sportswear giant distanced itself from West, before ending their business partnership, after he posted a series of anti-Semitic comments on social media.
In a statement, Gulden said: “The numbers speak for themselves. We are currently not performing the way we should.”
Kanye West poses during the finale of Yeezy Season 2 during New York Fashion Week at Skylight Modern on September 16, 2015 in New York City.
Adidas is still deliberating whether or not to bin the remaining Yeezy stock. It would inflict a €500m ($536m; £443m) hit to profits if it is all scrapped, and yesterday’s statement marked Adidas’ fourth warning since July 2022.
A separate shake-up of the business could cost Adidas an additional €200m, potentially increasing the company’s operating loss to €700m on the year.
US-traded shares in Adidas fell by almost 9 per cent after the announcement, which added Adidas expects to return to profit in 2024.
At the same time the company revealed that its operating profit for last year had fallen to €669m (£591m), two thirds lower than in 2021.
The termination of the Yeezy partnership is just one of a number of issues facing Adidas. It has closed shops in Russia and suspended its online store in the country in response to the invasion of Ukraine. In China, meanwhile, Adidas’ business was heavily impacted by the zero-Covid measures in large Chinese cities.
Gulden joined Adidas from Puma at the start of the year, after his predecessor was ousted due to the profit warnings.
