Adidas is suffering after bidding goodbye to Kanye West. The brand and the celebrity majorly uplifted each other with their Yeezy collaboration, which began in 2015. The partnership became super successful, making billions of dollars in revenue, which came to an end due to West’s controversial statements and will probably result in a loss of $1.3 billion for the brand.
Ye had proved to be a cash cow for the brand all these years. And as Adidas tries to move on, it must face one challenge; What to do with millions of dollars of Yeezy products and how to fill the loss gap?
Adidas CEO acknowledges the potential losses after split with Kanye West
Adidas has a lot to cover after the gap left by Kanye West. As per People magazine, there is an expectation of the company to lose about $1.3 billion in revenue due to the split. The $28.8 billion worth of brand is planning to come up with a new plan to boost its sales in 2023, the failure of which could cost $534 million in operating profits along with one-off costs of $213 million. If all this does come to reality, it could be a total of around $750 million.
Recently appointed CEO Bjørn Gulden accepted how the numbers tell it all by saying, “We are currently not performing the way we should”. The brand claims to have retained the rights for all the Yeezy brands. This allows them to continue promoting and selling under the line’s name. However, there will no longer be any production of Kanye West products.
The CEO added that they will now be focusing on working with athletes and its own employees in order to rebuild. While the losses due to Ye’s exit cannot be avoided now, there are reasons why the German brand decided to let go of the Donda singer.
Factors that caused Adidas to split with Ye
There is no doubt about the influence that the Yeezy rapper has globally. After turning a blind eye for a long, Adidas announced the ending of their partnership with Kanye, not only due to his anti-Semitic comments but also his beef with Kasper Rørsted. Thereafter, reports of Ye misbehaving with a minority designer of the brand also surfaced. It will be seen how the company recovers from the major split now.
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Do you think Adidas will be able to recover from its losses anytime soon? Comment your thoughts.