Adidas said earlier this month that it expects to lose $1.3 billion in revenue

A lack of Yeezy products will also reduce operating profit by $534 million, with the company projected to break even this year, Adidas said. Adidas said earlier this month that it expects to lose $1.3 billion in revenue this year after ending its nine-year partnership with Ye, leaving the company stuck with a lot of unsold Yeezy-branded merchandise. Adidas said it would try to repurpose some of it without the Yeezy branding. The numbers speak for themselves. We are currently not performing the way we should, CEO Bjørn Gulden said in a statement. “2023 will be a year of transition to set the base to again be a growing and profitable company.” Their response to the idea of selling the Yeezy stock for a good purpose was split. Holly Huffnagle, director of combating antisemitism for the American Jewish Committee, said a financial investment from Adidas toward fighting hatred against Jews could be “a good start,” but called on the company to make a more comprehensive effort. Ye’s controversial remarks also led to break-ups from other major brands. He ended a deal with Gap last year and the company soon after removed Yeezy Gap products from its stores and website. Anyone who wanted to get rid of their Yeezys after Ye’s comments could sell them – Hannula said he had not seen angry fans burning or destroying their shoes in protest, as some Dolce & Gabbana shoppers did after the Italian label weathered its own racism scandal in 2018. “I’ve seen some people make customs, or paint over the labels,” he said. Adidas is just the latest company to end connections with Ye, who also has been suspended from Twitter and Instagram over antisemitic posts that the social networks said violated their policies.

What we are trying to do now over time is to sell parts of this inventory and donate money to the organizations that are helping us and that were also hurt by Kanye’s statements, he said. Stored in warehouses around the world, the sneakers are a reminder of the once-fruitful tie between Adidas and Kanye West, the rapper now known as Ye. Since the first Yeezy Boost 750 shoe dropped in February 2015, his Yeezy brand became a defining force in the sportswear industry and an incredibly lucrative cornerstone for Adidas. Adidas has strongly protected its triple-stripe trademark over the years, although not always successfully. In January, for example, a federal court in New York City ruled that the striped designs used by fashion designer Thom Browne didn’t violate Adidas’ trademark. For 2023, Adidas forecast underlying operating profit at roughly break-even level when taking into account the sales loss, should it fail to find a way to sell the Yeezy inventory. Yeezy products generated nearly $2 billion in sales last year for Adidas accounting for 8% of the company’s total sales, according to Morgan Stanley. The line also helped Adidas get shelf space at major retailers and brought new customers into the stores who purchased other Adidas merchandise. The losses forced the company to issue four profit warnings over six months, leading both Moody’s and S&P to downgrade its debt last month. CBS News has reached out to both Adidas and representatives for Ye and is awaiting a response. The earnings presentation on Wednesday was Mr. Gulden’s first at Adidas, after he spent more than a dozen years as chairman at its crosstown rival Puma.

Both companies are based in the same town in Bavaria, Herzogenaurach, where the Dassler brothers, Rudolf and Adi, founded them after World War II. In a statement on Tuesday, Adidas wrote: “Adidas does not tolerate antisemitism and any other sort of hate speech. Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.” Gulden said the results for the Adidas were “a little better than we had expected” as the company seeks to restart growth and move beyond the breakup with Ye. He called 2023 “a year of transition” on the way to “a better ’24 and a good ’25.” Severing the agreement with Ye left the company with a mound of sneakers and clothing, resulting in potential losses of €1.2 billion in sales and about €500 million in profit this year. Adidas doesn’t break out Yeezy sales numbers, but the impact will be more severe than expected given that the brand has ended production of all Yeezy products and ceased royalty payments, according to Morningstar analyst David Swartz in a note published Tuesday. Gulden added that the company is still working on the details of how and when the selloff will take place. Adidas outlet online has ended its partnership with the rapper formerly known as Kanye West over his offensive and antisemitic remarks, the latest company to cut ties with Ye and a decision that the German sportswear company said would hit its bottom line. Adidas is “getting closer and closer to making a decision” on what to do with the sneakers and the “options are narrowing,” new CEO Bjorn Gulden said in a conference call Friday after reporting 400 million euros ($441 million) in lost sales at the start of the year. Adidas is “getting closer and closer to making a decision” on what to do with the sneakers and the “options are narrowing,” new CEO Bjorn Gulden said in a conference call Friday after reporting 400 million euros ($441 million) in lost sales at the start of the year.

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