Adidas has already been suffering since the split with Kanye West. But with 2023 here, they are bracing for more losses. After enjoying profits for nearly a decade, the partnership came to an end, the effects of which have left the company reeling. Although they certainly have made internal changes and knew the calculated risks that were about to hit in waves.
The year 2022 ended with a fall in global revenue, in addition to other factors. With CEO Bijon Gulden taking over, the company is pretty open about the expected losses in 2023.
What do the numbers indicate about Adidas’ performance in 2023?
While Adidas remains hopeful of turning profits in the future, the near future still points to more losses. As per XLLMag, the company is expecting a net operating loss of $738 million, making it the first loss of the category in 31 years. The company already suffered a loss of $763 million in the 4th quarter of 2022. The sales loss could be about €1.2 billion, with a corresponding €500 million loss due to unsold Yeezy products. A one-off loss of €200 million can be expected, in addition to the negative impact loss of €500 and €700.
New CEO Bijon Gulden took over the company, being well aware of the situation it was in. “2023 will be a transition year to build the base for 2024 and 2025,” he explained. This strategic plan is to lower the discounts and reduce their inventory. He wants to bring the focus back to its products collaborating with athletes and retailers. Moving on from Kanye West, the business will pick itself by motivating its employees with the promise of staying strong in the future.
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Adidas is considered one of the leading sports brands. They believe that the dent caused by splitting with West is temporary. But the numbers have spoken for themselves so far.
A look into the losses faced by both Adidas and Kanye West
When Adidas decided to split with West, they predicted a loss of $263 million in 2022. But 2023 came with an announcement of an estimated $1.2 billion lost from the deal ending. On the other hand, the rapper also lost his billionaire status since the majority of his income came from his deal. Meanwhile, there were reports of the two coming together to sell off the rest of the products, but no confirmation has been given yet.
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What do you think will Adidas do to make up for its losses next? Put your opinions in the comments.