The Adidas group wants to continue to sell parts of the stock of products from the ‘Yeezy’ series, which it launched together with rapper Kanye West, even after the divorce from the controversial musician. A “significant amount” will be donated to organizations working against discrimination and hatred, including racism and anti-Semitism, Adidas announced in Herzogenaurach on Friday.
The costly switch from the controversial rapper and his “Yeezy” products left Adidas with a loss in the first quarter. The bottom line was a minus of 24 million euros in the first three months of 2023, Adidas announced in early May. Last year around the same time, the company still made a profit of 310 million euros.
The collaboration was terminated due to anti-Semitic remarks
The rapper had partnered with Adidas to market expensive lifestyle products – a very lucrative business for both parties. For Adidas, “Yeezy” meant billions in sales with a high profit margin. After anti-Semitic statements from West, Adidas had to end the collaboration.
Since then, millions of pairs of shoes that had already been produced lay in stocks all over the world. “The company is currently investigating if and when adidas will launch more products from stock,” the company said. If the products still in stock had to be completely destroyed, the annual result would have fallen by 700 million euros.
Nevertheless, the new CEO Björn Gulden thinks the first quarter is slightly better than expected. At just under EUR 5.3 billion, currency-adjusted sales were at the same level as last year. In addition to the problems with “Yeezy”, Adidas is mainly struggling with large stocks. However, these are already 300 million euros lower than at the beginning of the year.
A class action lawsuit from investors in the US, accusing Adidas of not responding in a timely manner, makes things even more difficult. They should have known earlier what the risk was of working with West. At the General Meeting, some of the shareholders refused to approve the actions of the Executive Board and the Supervisory Board. (dpa, rtr, lw)
Soource :Watson
I am Amelia James, a passionate journalist with a deep-rooted interest in current affairs. I have more than five years of experience in the media industry, working both as an author and editor for 24 Instant News. My main focus lies in international news, particularly regional conflicts and political issues around the world.
