Catastrophic Stockpile: Adidas Shares Plunge After Kanye West Fallout
Adidas and West had created the highly successful Yeezy brand, but Adidas terminated their partnership last year following the rapper's controversial remarks.
Shares of Adidas fell dramatically on Friday after the company announced that it could suffer huge losses this year as a result of its failed collaboration with rapper Kanye West.
Adidas and West had created the highly successful Yeezy brand, but Adidas terminated their partnership last year following the rapper's controversial remarks.
The company is still trying to determine what to do with the huge stockpile of unsold Yeezy merchandise, which could have a significant adverse impact if not sold. Adidas warned that it may lose $1.3 billion in revenue and $535 million in operating profit if it can't sell the merchandise.
The company also forecast a drop in sales and one-off costs of roughly $214 million this year, which could push the firm to an operating loss of almost $750 million.
However, CEO Bjørn Gulden expressed confidence that Adidas will return to profitability in 2024 and emphasized that the company has "all the ingredients to be successful".
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