Kanye West and his Yeezy brand were a huge moneymaker for Adidas. Overall, Ye was able to turn Adidas into one of the most fashion-forward sportswear brands in the world. After years of stagnancy, Yeezy uplifted Adidas to the point where they were doing more sales than Jordan Brand. However, that has all changed now that Kanye is no longer with the brand. Of course, you can't really fault Adidas for the decision when you consider how Ye was siding with the Nazis and professing his love for Hitler. At some point, you have no choice but to pull the plug.
That said, Adidas has taken a very large hit in terms of its financials. In numerous reports, it has been noted that the German brand is holding on to $530 million worth of Yeezys. Moreover, these Yeezys still have the Yeezy branding on them, which means they cannot sell the shoes without Ye's consent. Just a few weeks ago, rumors circulated saying that both sides had reached an agreement on selling these kicks. However, nothing actually materialized from that.
Kanye West Has Adidas Scrambling
Now, according to CNBC, Adidas is facing some catastrophic losses. Their fourth-quarter numbers show an operating loss of around $760 million. Additionally, this includes a net loss of about $500 million. Dividends for shareholders will likely go from $3.50 to about $0.80, which is certainly not a good sign. Lastly, Adidas is projecting its net operations losses for the year to be $700 million. The last time the brand operated at a loss was about 31 years ago.
Overall, this is a bad sign for Adidas, and they will have to figure out some sort of plan of attack. The sportswear and sneaker games can be difficult, and it is all about trends and image. If Adidas can't show people that it is still a hip imprint, then it could be facing an extremely difficult road. However, it should be noted that these operations losses include the $500 million in Yeezys that cannot be sold. Either way, this is going to be a story to follow over the next few months.
[Via]
