sport news Adidas' Yeezy dilemma explained: Why did they split with Kanye West and what ... trends now
German sportswear giant Adidas could potentially be facing their first annual loss in 30 years, with the break-up of their partnership with the rapper Kanye West leaving the company facing a financial headache.
Adidas had held a long-standing partnership with West, now known as Ye, since 2013.
The manufacturer ended the collaboration in October, announcing it would cease production of all 'Yeezy branded products and [stopping] all payments to [West] and his companies'.
The partnership was ended due to the rapper's increasingly erratic behavior and anti-Semitic outbursts.
Adidas announced on Wednesday that the company may be faced with an overall revenue loss of £1.2 billion due to unsold stock, as they they weigh up their options.
Adidas CEO Bjorn Gulden revealed the financial impact of ending the deal with Kanye West
A tie up with the rapper once known as Kanye West could result in a £1.1bn revenue loss
How did this come about?
Adidas acted in October after West caused controversy with a series of anti-Semitic comments. The rapper said in a social media post that he would go 'death con 3 on Jewish people', then doubled down in media interviews with comments that included vile remarks about Jewish people.
The comments prompted Adidas to review their partnership, with the company then confirming it would terminate their relationship with the rapper.
'Adidas does not tolerate antisemitism and any other sort of hate speech,' a company statement read at the time. 'Ye's recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company's values of diversity and inclusion, mutual respect and fairness.
'After a thorough review, the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products and stop all payments to Ye and his companies. adidas will stop the adidas Yeezy business with immediate effect.'
The sportswear giant warned at the time the termination of the partnership would have a significant impact on their financial results, with the 'Yeezy' products a highly lucrative part of their business model.
Adidas revealed on Wednesday that the split had cost the company £534million in sales during the fourth quarter of 2022, with the Yeezy shoes expected to have brought in £1 billion in revenue this year.
How has this impacted Adidas?
Bjorn Gulden, who took over as Adidas CEO at the start of January, has claimed 2023 will be a 'transition year' to help build their base for 2024 and 2025.
Gulden has told investors the aim is to build the brand with a strategy that balances global direction with local needs, that is fast and agile.
'We need to reduce inventories and lower discounts,' Gulden said. 'We can
