Adidas has lost about $500 million last year, majorly due to the split with Kanye West. It was a matter of ethics versus profits for Adidas after the events of last year. The brand may have leaned towards the higher road but it is certainly costing them now. For them, the profits are not to kick off anytime soon.
While the brand has survived in the market since 1949, its collaboration with Kanye West was certainly one of the most successful ones. After trying long to continue with the partnership, the company finally decided to let go of the rapper. The result of this was shaking the company from within as it grapples to find a solution.
What the numbers say about Adidas after splitting with Kanye West
There was a time when fans would stand in a queue outside Adidas stores for Yeezy shoes. Things look very different today as the company struggles to on what to do with the unsold products. As per NPR, the company faced on net loss of $540 million by end of 2022. The other factor is a reduced profit as opposed to the $230 million that they made in the previous year in China. They saw a 50% drop of revenue in the country’s market due to shipping costs.
Now, the Yeezy line amounted to 15% of the company’s revenue. The fourth quarter saw a mere spike of 1.3%, falling short of 600 million when compared to the same quarter in the previous year. Although there has been an overall net profit of $638 million with a 6% rise for the year.
ALSO READ: After Ending Their Billion Dollar Partnership, Will Adidas Now Turn Yeezy’s Into Ashes?
Meanwhile, the company is looking for alternate ways to deal with the situation and keep up with the market. Here is what they have done so far.
The measures that Adidas is taking to overcome Yeezy losses
There have been speculations about Adidas collaborating with Ye again to sell off $500 dollars worth of Yeezy products. While that remains to be seen, their Ivy Park launch with Beyonce was an attempt to find a new face. Changing people internally, Arthur Hoeld will replace Roland Auschel after 33 years in the role of Global Sales Head. New CEO Bjorn Gulden will take over to handle sales and marketing work as Brian Grevy steps down.
Gulden has already acknowledged the losses while bracing for more of them. As per the new CEO, the company can expect to make profits by 2024.
ALSO READ: A 30% Surge! Despite the Kanye West Breakup, Adidas Has Seen a Positive Growth in Demand for the Rapper’s Yeezy Collection Says CEO
Do you think Adidas will be able to re-establish itself after splitting with West? Put your thoughts in the comments.