Adidas is still weighing what to do with Kanye West’s large stockpile of Yeezy products

Adidas is still weighing what to do with Kanye West’s large stockpile of Yeezy products

Herzogenaurach, Germany: Adidas said on Wednesday it is still weighing what to do with Kanye West’s large inventory of Yeezy products after ending its partnership with the controversial rapper.

Failure to sell Western-related clothing and footwear could result in a 1.2 billion euro ($1.3 billion) loss in revenue, the group said as it released its full-year results for 2022.

Adidas cut ties with West, officially known as Ye, in October after a series of anti-Semitic outbursts.

As a result, the group ended up releasing the highly successful Yeezy line, which was created in collaboration with West.

“If the company decides not to change any of the existing Yeezy product, it will be forced to write off the entire inventory,” the statement said.

This will reduce the company’s operating income by an additional 500 million euros in 2023, he said.

With one-off costs expected to reach 200 million euros due to the company’s strategic review, Adidas said it could end up with an operating loss of 700 million euros in 2023.

The group’s new CEO, Björn Gulden, said the company would use 2023 as a “transition year to build a base for 2024 and 2025.”

“We need to reduce inventory and reduce discounts. Then we can start building a profitable business again in 2024,” he said.

Next year is an important year for sportswear companies with the European Football Championships and the Olympic Games.

On Wednesday, Adidas also reported an 83 percent drop in net profit to 254 million euros in 2022, confirming preliminary results announced in February.

In addition to the Yeezy line’s woes, it faces “increased recession risks in Europe and North America, as well as uncertainty about the recovery in Greater China.”

“The company’s earnings development will also be affected by initiatives to significantly reduce the high level of reserves,” he added.

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