After dropping Kanye West, adidas is now expecting to lose $740 million due to unsold Yeezy shoes and stocks, marking the company’s first annual loss in over 31 years.
About a month ago it was reported that Balenciaga, J.P. Morgan Chase and Adidas all facing troubles after dropping rapper and enterpreneur Kanye West also known as 'Ye'.
The snowball continues to build up for adidas as it is now being reported that the brand expects to face its first annual loss in 31 years because they cannot offload a stockpile of Yeezys. Subsequently, adidas faces a loss of $740 million for 2023, after reporting a fourth quarter operating loss of $763 million.
It is well known that Ye had a very tumultuous year in 2022 after revealing some remarks that were deemed anti-Semitic. And things only continued to pile up for the Chicago rapper after he continued to double down on his personal views.
Besides backlash from some angry fans and critics online, Ye ended up getting dropped from his partnerships with luxury fashion brand Balenciaga, adidas and financial institution J.P. Morgan Chase. After cutting ties with Ye and his Yeezy brand in October 2022, adidas would later reveal in 2023 that they might end up losing over $1 billion in revenue.
On Wednesday (March 8), the German shoe company reported their $763 million loss in the fourth quarter of 2022, and for 2023, the brand projects that it will lose $740 million, marking the company’s first annual loss in 31 years.
According to a report published by the brand, underlying operating profits are expecting to “be around break-even level reflecting sales loss of around € 1.2 billion [$1.28B USD] and corresponding negative operating profit impact of around € 500 million [$530M USD] from potentially not selling Yeezy stock.”