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Adidas Returns First Loss in 30 Years After Kanye Rift

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By Jaden Francis - - 5 Mins Read
Kanye West speaking during an interview with Jimmy Kimmel
Kanye West in a Jimmy Kimmel interview | YT

For the first time in 30 years of running a smooth business, Adidas hit its first major loss after its dissent with Kanye West, which led to the termination of its contract with the brand ambassador. 

Earlier in 2022, Adidas abruptly terminated its contract with rapper Kanye West after he shared a combative post on his Instagram and X account, formerly Twitter, claiming that the brand does not support hostility.

Kanye signed a partnership deal with Adidas in 2013 after the brand announced its endorsement of the rapper; before that, Adidas sales in North America, which was the heart of sportswear sales, went down, and sales were flat across the company.

Three years after the partnership, Adidas recorded an 18% increase in annual sales.

Yahoo Finance awarded Adidas the Sports Business of the Year, citing several hot Adidas products, including Ultra Boost, MMD, and West's Yeezy.

Adidas's Yeezy partnership with Kanye West further broadened its revenue.

After cutting ties with Kanye, the company has been struggling to gain its stand, temporarily suspending the sales of the highly profitable West's Yeezy sneakers collection.

In 2023, the company recorded a total loss of €58m (£50m) compared with €254m (£217m) profit the previous year. It was also reported that Adidas' revenue had decreased to €21.4bn (£18.3bn), with the suspension of sales of its Yeezy collection causing a lag of almost €500m (£427m).

The company's operating profit decreased from €669m (571.2m) in 2022 to €268m (£228.8m) in 2023.

As a result, the group has decided to sell off a portion of the outstanding Yeezy stock collection to West. This decision was made to avoid writing off another €500m (£431.8m) which would have been the case if the stocks were destroyed.


Kanye West pictured exiting a New York hotel
Ye | Shutterstock


On the other hand, the company anticipates that currency-neutral sales will increase at a mid-single-digit rate in 2024, assuming Adidas sells the remaining Yeezy collection stocks at cost, which will result in €250m (£213.4m).

A Bright Future For Adidas Revenue

Adidas CEO Bjorn Gulden says: "Although this might not be good enough, 2023 ended better than we had thought at the beginning of the year,"

Despite losing a lot of Yeezy Adidas revenue and stable sell-in strategies, we do have a flat revenue.

"We were anticipating a negative or substantial operating result but we achieved an operating profit of €268m instead. With a disciplined go-to-market purchasing process, we have reduced our stocks by almost €1.5Extinct in the US, and now we have healthy stocks everywhere."

Golden continued, " the product for 2024 is good. We have a new marketing strategy for both original products, and we will also continue to strengthen the company brand. With clear strategies, our sportswear business will strengthen distribution in the wholesale and commercial channels."

"We should begin to see growth in Q1, but stronger growth in Q2 of the year. Although we still have a lot to do, I feel confident that Adidas will be back in its place again."