Although Adidas chose to cut ties with Ye because of his anti-Semitic comments, it looks like this decision could end up costing the company a HUGE amount!
Company may face ‘Significant Adverse Impact’ due to unsold Yeezy stock
Adidas recently released its “top and bottom” financial outlook for 2023, and CEO Bjørn Gulden candidly admitted that they “are not currently operating in the way they should.” [they] should.”
“The numbers speak for themselves. We’re not performing the way we should right now.”
Further details in the press release indicate that there could be a “significant adverse effect from not selling existing inventory” from the company’s “Yeezy inventory”.
In fact, if Adidas made the decision “not to reuse any existing Yeezy products in the future,” it could lose nearly $1.3 billion in revenue. Additionally, this will “result in the write-off of existing Yeezy inventory and will reduce the company’s operating profit” by $535 million.
We should also mention that “this repurpos[ing]” will take the form of Adidas stripping the Yeezy branding of items and continuing to sell the rest.
However, retail expert Burt Flickinger says CNN that the situation is not as simple as one might think, as “there really are no good options for a struggling brand that lies somewhere between prestige and luxury.”
2023 ‘Will Be A Transformation Year’ For Adidas
In light of these prospects, Gulden noted that this year will be “a year of transition” and the company is committed to starting operations again.
“The year 2023 will be a transformative year to establish the base again as a growing and profitable company. We will focus exclusively on our consumers, athletes, retail partners and adidas employees. Together, we’ll work to warm up the brand, improve our product tools, better serve our distribution, and make sure adidas is a great and fun place to work. adidas has all the ingredients for success: A great brand, great people, great partners and a global infrastructure second to none.”
He concluded his message by noting that, while he believes the company will eventually “shine again,” they will “need some time.”
“We need to put the pieces back together again, but I believe that over time we will help adidas shine again. But we need some time.”
What do you think about the overall situation now that Adidas has given up on Kanye West? Also, do you think people will buy “reused” shoes that have their Yeezy branding stripped or Adidas just accept the letter L?
