Adidas, the renowned German sportswear brand, announced on Wednesday that it incurred an annual loss for the year 2023, attributing it partly to the repercussions stemming from the termination of its partnership with the controversial rapper Kanye West.
The company experienced a loss of 75 million euros ($82 million), a stark contrast to the profit of 612 million euros recorded in the previous year.
Revenue dropped by five percent to 21.4 billion euros, with significant impact felt in the United States, primarily due to the cessation of sales of Yeezy trainers, which were designed in collaboration with West.
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Sales saw a slight decline in the fourth quarter, with a notable decrease in North America as Adidas scaled back wholesale transactions in efforts to mitigate excess inventory.
In 2022, Adidas terminated its partnership with West following a string of anti-Semitic comments, leaving the company with thousands of unsold Yeezy shoes that they had collaborated on developing.
The revenue from two Yeezy sales in 2023 totaled 750 million euros, significantly lower than the 1.2 billion euros generated by the brand in 2022.
Adidas is donating the profits from the sales to charitable organizations.
In 2024, Adidas anticipates a “mid-single-digit rate” growth in sales. The company intends to sell the remaining Yeezy revenue at cost, projecting sales to reach approximately 250 million euros.
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