Adidas reports million-dollar loss in 2023 after collaboration with Kanye West ends

AdidasThe German sports giant suffered an unexpected annual loss of $63 million in 2023, hit by the dissolution of its profitable partnership with the rapper. Yesformerly known as Kanye WestIn October 2022, he made anti-Semitic comments, which Sales declined significantly in North America And its tax burden increased substantially.

According to the data of cnnNorth American market is the second largest market AdidasA decline of more than 16% was experienced in sales throughout 2023. The decline was attributed to the company’s decision to reduce sales to wholesalers to reduce its high inventory levels.

Executive Director of Adidas, Bjorn Guldenmentioned him European brands find it difficult to compete in the United States The comparison highlights the need for North American brands to invest more in sports such as baseball and basketball to strengthen their reputation among American consumers.

attempts to break up with Yes he led Adidas Deciding to sell remaining inventory of products Yeezy declaration of intention to Donate a significant amount of money to organizations “Selected organizations that work to combat discrimination and hatred, including racism and anti-Semitism.” The move is part of the company’s actions to reduce the impact after the collaboration with Kanye West ended.

Adidas is facing an adverse financial situation with a higher tax burden than last year, although the company expects this pressure on its profits to ease in the future. “Going forward, the company expects the tax rate to return to normal as its operating profit improves,” the firm said.

Despite recording a net loss, the company recorded an operating profit of $293 million last year, representing a decline of nearly 60% compared to 2022. new York Times.

On the other hand, Adidas see a promising future in chinaIts third-largest market, where sales grew more than 8% last year, achieved an impressive growth of 37% in the last three months of 2023 alone compared to the same period in 2022. Double digit growth in this country for the current year,

Despite the challenges, Adidas’s footwear portfolio, which includes the popular Samba and Gazelle models, saw global sales increase by 4%. This increase is in contrast to a 6% decline in sales of the same brand of clothing. As Adidas CFO Harm Ohlmeyer admitted, “2023 was not a good year for us,” reflecting the magnitude of the setbacks the company has had to overcome.