The sporting goods manufacturer suffered huge losses in the first quarter. The reason for this: the breakup with rapper Kanye West and, consequently, the production of “Yeezy”. The company recorded a loss of 24 million euros, as announced in Herzogenaurach.
At the same time last year, Adidas made a profit of 310 million euros. Expensive lifestyle products were launched thanks to a collaboration with the rapper. This was a very profitable business for both sides. For Adidas, “Yeezy” meant billions in sales at a high margin.
After West made anti-Semitic remarks, the sporting goods manufacturer had to stop doing business together. If products still in storage had to be completely destroyed, this would burden the annual result by €700m. In addition, there is a class action lawsuit filed by investors in the United States, accusing the company of not responding in time.
However, new CEO Bjorn Golden considers the first quarter to be somewhat better than expected. At just under €5.3 billion, currency-adjusted sales were at the level of the previous year. In addition to Yeezy’s problems, Adidas is mainly struggling with large inventories. However, this amount has already decreased by 300 million euros from what it was at the beginning of the year.
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