Adidas’ breakup with Ye, formerly known as Kanye West, is a pricey one.
The company warned Thursday that it’s expected to lose $1.3 billion (1.2 billion euro) in revenue this year because it’s unable to sell the designer’s Yeezy clothing and shoes. Adidas ended its nine-year partnership with the rapper last October because of his antisemitic remarks.
In a statement, Adidas said its financial guidance for 2023 “accounts for the significant adverse impact from not selling the existing stock.” If the company can’t “repurpose” any of the remaining Ye clothing, Adidas said that could cost the company $534 million (500 million euro) in operating profit this year.
The company said shortly after the partnership was dissolved that it would try to sell the clothing, stripped of the Yeezy name and branding. Adidas said selling the sneakers under its own branding would save the company about $300 million in royalty payments and marketing fees.
Despite that attempt, Adidas is going to have problems repurposing his clothing, an analyst previously told CNN.
“There really are no good options for this distressed brand that sat somewhere between prestige and luxury,” said Burt Flickinger, retail expert and managing director at retail consultancy Strategic Resource Group.
Source: CNN
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