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While Adidas chose to cut ties with Ye over his antisemitic remarks, it looks like this decision may ultimately end up costing the company a HUGE bag!
Adidas recently published its “top- and bottom-line” financial outlook for 2023, and CEO Bjørn Gulden straight-up admitted that they “are currently not performing the way [they] should.”
“The numbers speak for themselves. We are currently not performing the way we should.”
Further details in the press release point out that there could be a “significant adverse impact from not selling the existing stock” from the company’s “Yeezy inventory.”
In fact, if Adidas makes the decision “not to repurpose any of the existing Yeezy product going forward,” it could lose nearly $1.3B in revenue. Additionally, this would “result in the write-off of the existing Yeezy inventory and would lower the company’s operating profit” by an additional $535M.
We should also mention that this “repurpos[ing]” would be in the form of Adidas stripping the items’ Yeezy branding and continuing to sell the remaining stock.
However, retail expert Burt Flickinger tells CNN that the situation isn’t as simple as it sounds, as “there really are no good options for this distressed brand that sat somewhere between prestige and luxury.”
In the face of these prospects, Gulden notes that this year will be “a year of transition,” and the company is committed to getting the ball rolling once again.
“2023 will be a year of transition to set the base to again be a growing and profitable company. We will put full focus on the consumer, our athletes, our retail partners and our adidas employees. 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. adidas has all the ingredients to be successful: A great brand, great people, fantastic partners and a global infrastructure second to none.”
He wrapped up his message by noting that, while he’s convinced that the company will eventually “shine again,” they’re going to “need some time.”
“We need to put the pieces back together again, but I am convinced that over time we will make adidas shine again. But we need some time.”
What do you think about the overall situation now that Adidas has ditched Kanye West? Additionally, do you think people would purchase “repurposed” shoes stripped of their Yeezy branding, or does Adidas just have to accept the L?
