Adidas’ breakup with Ye, formerly known as Kanye West, was costly.
The company warned Thursday that it will lose $1.3 billion (1.2 billion euros) this year because it can’t sell Yeezy designer clothes and shoes. Adidas ended its nine-year partnership with the rapper last October over antisemitic remarks.
In a statement, Adidas said its financial guidance for 2023 “results in a significant negative impact from not selling existing shares.” If the company cannot “repurpose” any of Ye’s remaining clothing, Adidas said that could cost the company $534 million (500 million euros) in operating profit this year.
The company said shortly after the partnership was dissolved that it would try to sell clothes, stripped of the Yeezy name and branding. Adidas says selling the sneakers under its own brand will save the company $300 million in royalty payments and marketing costs.
Despite these efforts, Adidas will have trouble replacing its apparel, analysts previously told CNN.
“There’s no good choice for this distressed brand that straddles the line between prestige and luxury,” said Burt Flickinger, retail expert and managing director at retail consultancy Strategic Resource Group.
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Source: CNN
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