Adidas sits on Yeezy sneakers after feud with US rapper
German sportswear company Adidas on Friday reported a net loss of €30 million ($33 million) from January to March this year.
The figures, which compare with a profit of €490m in the same period last year, come seven months after a split from controversial American rapper Ye, formerly known as Kanye West, who left €1.2bn of his popular Yeezy shoes not yet sold.
Adidas split with Ye over a series of anti-Semitic outbursts and other offensive comments on social media and in interviews.
The termination of the partnership also cost Adidas €600m in lost sales in the final three months of 2022, contributing to a net loss of €513m.
What’s with the shoes?
New Adidas CEO Bjorn Gulden said on Friday that his company was “ever closer to making a decision” on what to do with the Yeezy sneakers, designed in collaboration with West/Ye.
However, he declined to say what would happen to them or if they could simply be destroyed.
In the past, he had noticed disadvantages with other options: if they were sold, royalties would have to be paid to Ye; removing brand identification would be dishonest; and giving them away to people in need could mean that they were simply resold because of their high market value.
Gulden said the collapse of the wildly successful Yeezy line was responsible for lost sales of around €400m.
Adidas announced in February that it could suffer an operating loss of up to €700m this year if it decided to write off the value of all its existing Yeezy inventory.
Gulden became CEO in January after splitting with the rapper from rival Puma.
Adidas calls 2023 ‘a year of transition’
Net sales were almost flat at €5.28 billion, defying bear market expectations, and Adidas’ share price rose 7.5% in the afternoon on the Frankfurt Stock Exchange, with poor performance apparently already quoted in the markets before the announcement.
Gulden said the quarter ended “a little better than we expected”.
He pointed to positive developments in some areas, such as the popularity of his Samba, Gazelle and Campus trainers.
Sales in Latin America grew 49%, offsetting a 9% decline in Greater China.
“2023 will be a turbulent year with disappointing numbers, where maximizing our short-term financial results is not our objective,” said Gulden. “It’s a transitional year to build a solid foundation for a better 2024 and a good 2025 and beyond.”
tj/msh (Reuters, dpa, AP, AFP)
Source: DW
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