Adidas continues to struggle with its separation from scandal rapper Kanye West. Some of his clothing line has been sold out. CEO Gulden hopes for growing business from retro products.
Adidas has temporarily stopped selling Yeezy products from controversial scandal rapper Kanye West. After two successful waves, there will be no more this year, said CEO Björn Gulden on Wednesday.
The comparatively high-priced and trendy designer products once brought Adidas 1.5 billion euros in sales. After West’s anti-Semitic derailments, the company separated from its guarantor of success. The products were stuck in warehouses. The sale of the remaining stocks has brought 750 million euros in sales into the coffers so far this year. Last year it was 1.2 billion in the first nine months. Overall, Adidas had sales of 16.6 billion euros in the first nine months of this year – a decrease of four percent compared to the same period last year.
As part of the Yeezy sale, Adidas committed to donations to organizations of victims of the Nazi regime. So far, 140 million euros have been made available, said Gulden. It is unclear whether there will be further sales next year. “No decisions have been made yet.” Stopping sales is an option.
Profit warning after separation from West
Adidas issued a profit warning at the beginning of the year after parting ways with West, bringing an operating loss of up to 700 million euros into play. The figure was later corrected to a minus of up to 450 million euros.
Adidas is now assuming a loss of 100 million euros due to lower depreciation and better business. “Of course we know that our current performance is not good enough,” said Gulden. The company is still struggling with high inventory levels. These have now been reduced by 23 percent to 4.8 billion euros – bought with sometimes high discounts.
Sales of retro shoes such as the Samba or Spezial models were particularly good, emphasized Gulden. Significantly more could have been sold if the products had been available in sufficient quantities. The manager is thinking about extending this line. The Franconians are also expecting a boost from next year’s major sporting events such as the Olympic Games in Paris and the European Football Championship in Germany. In addition, the recently difficult China business – one of the most important markets for Adidas alongside North America – should pick up again more strongly.
Source: Stern
