Adidas posts first loss in 30 years after Yeezy crisis
Adidas has posted its first loss in more than 30 years as the financial hit from abandoning its deal with the rapper Kanye West is laid bare.
The German sportswear giant recorded a loss of €58m (£50m) in 2023 compared to a €254m profit a year earlier.
Bjorn Gulden, chief executive, said the results were “by far not good enough”, although he said the end of 2023 was “better than what I had expected at the beginning of the year”.
Adidas has been left reeling from the collapse of its lucrative partnership with Mr West, who now goes by the name Ye.
Mr Gulden ruled out renewing the Yeezy partnership after a picture of him with Kanye West last month sparked speculation.
The Adidas chief said he had not been holding a business meeting with Mr West but had simply bumped into him by chance at a Los Angeles airport after the Super Bowl.
Speaking at a press conference, the Adidas boss said: “If you meet him in an airport, I don’t know what you do. Do you hide? Or what do you do?”
He said there was “no business discussion”, adding: “The contract has ended. We are selling off the inventory.”
Adidas and Mr West developed the Yeezy range of trainers which became one of the company’s most successful shoe lines, with sales of around $1bn (£808m) a year.
However, Adidas pulled the collaboration in October 2022 after Mr West made a series of anti-Semitic comments, including saying in a post on X, formally known as Twitter, that he intended to “go death con 3 on Jewish people”.
He later said on a podcast: “I can say anti-Semitic things, and Adidas can’t drop me. Now what?”
Adidas has been selling off its remaining stock from the Yeezy range in recent months, with part of the sales going towards donations to anti-hate charities.
The company said on Wednesday that revenues were down around 5pc at €21.4bn in 2023, with the discontinuation of the Yeezy deal contributing to a €500m decline in sales during 2023.
Adidas said it expected sales to improve this year, with double-digit growth forecast in the second half buoyed by growing demand for classic styles including its Samba and Gazelle shoes.
Mr Gulden said: “We feel we are in a very good position to grow in the footwear lifestyle segment.”
Adidas’s loss marks the first time it has been in the red since 1992 when it was rocked by the death of Horst Dassler, part of the founding family, and decision by his daughters to exit the company.
It was also facing fierce competition from rival Nike, which held a 47pc share of the US trainer market in the 1990s compared to Adidas’s 6pc.
Nike last month announced it was cutting more than 1,600 jobs in a bid to slash costs as it battles weaker sales. Nike bosses have said shoppers were only spending on major retail events such as Black Friday when they could get discounted prices.
In January, JD Sports slashed its profit forecasts following tougher Christmas trading. It caused shares in the company to plunge by more than a fifth.
