Adidas could lose around €1.2 billion in revenue in 2023 if it fails to sell existing Yeezy stock. The German sportswear company ended its partnership with rapper and fashion designer Ye, formerly known as Kanye West, the face of Yeezy, in October after the artist, ex-husband of Kim Kardashian, made a series of anti-Semitic comments .
The company said it was evaluating what to do with the trainers left in its warehouses, adding it had already factored in the “significant negative impact” of not selling products. Operating profit would fall by around €500 million if the company fails to move products, and Adidas expects single-digit sales declines in 2023. Adidas may choose to cancel remaining Yeezy products. Shares plunged 11% on Friday morning as traders reacted to the announcements.
The company has also projected one-off costs of up to €200 million, leaving Adidas’ worst-case scenario for the current year at a loss of €700 million for 2023. “The numbers speak for themselves. At the moment we are not performing as well as we should,” Adidas CEO Bjørn Gulden said in a press release. Adidas’ revenue increased by 1% in 2022, based on unaudited data, while operating profit fell from nearly €2 billion in 2021 to €669 million in 2022.