Adidas says it is facing a revenue loss of roughly $1.3 billion after dropping rapper Ye, formerly known as Kanye West, following his antisemitic comments in 2022.
The sneaker giant, which ended a five-year partnership with West last October, on Thursday released financial projections that show a “significant adverse impact from not selling the existing stock” of Yeezy products.
The backstock is expected to result in a $1.2 billion revenue loss for Adidas and an additional $700 million in lost operating costs if the brand opts “not to repurpose any of the existing Yeezy stock going forward,” according to the press release.
“The numbers speak for themselves. We are currently not performing the way we should,” said Bjørn Gulden, Adidas CEO, in the release.
The 45-year-old rapper has also worn and shown t-shirts proclaiming “White Lives Matter” while presenting what would be his final Yeezy collection, as previously reported by theGrio.
Following the show, he went on a social media rampage threatening to go “death con 3 On JEWISH PEOPLE,” as well as making fatphobic comments about R&B superstar Lizzo and harassing a Black female Vogue editor who criticized the rappers antics.
In a press release announcing West’s termination on Oct. 25, 2022, Adidas said it “does not tolerate antisemitism and any other sort of hate speech,” adding that the rapper’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.”
Adidas said Thursday that it expects its operating profits for 2023 to be “around the break-even level” amid the revenue loss from cutting ties with West.
Gulden said the brand in 2023 will focus on regaining its status as a “growing and profitable company.”
“We will put full focus on the consumer, our athletes, our retail partners and our adidas employees,” he said. “Together we will work on creating brand heat, improve our product engine, better serve our distribution and assure that adidas is a great and fun place to work.”
“We need to put the pieces back together again, but I am convinced that over time we will make adidas shine again,” Gulden added. “But we need some time.”
theGrio’s Maiysha Kai contributed to this report.
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