Adidas expects $1.3 billion in revenue loss after Ye split

Although Adidas decided to sever ties with Ye over his anti-Semitic remarks, it looks like this decision will end up costing the company a HUGE bag!

The company could face “significant negative impact” due to unsold Yeezy shares

Adidas recently released its “top and bottom line”. financial outlook for 2023, and CEO Bjørn Gulden directly admitted that they are “not performing properly at the moment [they] should.”

“The numbers speak for themselves. We are not currently performing as we should.”

Further details in the press release indicate that there could be “significant adverse effects if the existing shares are not sold” from the company’s “Yeezy inventory”.

If Adidas makes the decision “not to reuse any of its existing Yeezy products going forward,” it could lose nearly $1.3 billion in revenue. Additionally, it would “result in the write-down of existing Yeezy inventory and reduce the company’s operating profit by an additional $535 million.”

We should also mention that these “repurpos[ing]’ would take the form of Adidas removing the Yeezy branding from the items and reselling the remaining stock.

However, tells retail expert Burt Flickinger CNN that the situation isn’t as simple as it sounds, because “there really aren’t any good options for this ailing brand that sits somewhere between prestige and luxury.”

2023 “will be a year of transition” for Adidas

Given these prospects, Gulden notes that this year will be “a year of transition” and the company is committed to getting the ball rolling again.

“2023 will be a year of transition to lay the foundation to be a growing and profitable company again. Our focus will be on the consumer, our athletes, our retail partners and our adidas employees. Together we will work to create brand awareness, improve our product engine, better serve our distribution and ensure adidas is a great and fun place to work. adidas has all the ingredients to be successful: a great brand, great people, fantastic partners and a global infrastructure that is second to none.”

He concluded his message by noting that while the company believes it will “shine again” at some point, they “will need some time.”

“We need to put the pieces back together, but I’m confident that over time we will make adidas shine again. But we need some time.”

What are your thoughts on the overall situation now after Adidas dropped Kanye West? Also, do you think people would buy “repurposed” shoes without their Yeezy branding, or does Adidas just have to accept the L?