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Adidas Still Suffering Financially After the Termination of Yeezy Partnership

Adidas is struggling with a hit to sales after cutting ties with Kanye West last October following the rapper’s posting of anti-Semitic tweets on Twitter. Designing trainers under the ‘Yeezy’ brand, the loss of business cut sales for Adidas by £350m in the first quarter of the year. Overall, total revenue fell by 1% and the latest results highlight a 20% loss in sales in North America. 


Following the condoning of the controversial Ye, the company is still yet to decide what to do with its £1bn remaining Yeezy stock, which may either be scrapped or sold. If chosen to be scrapped Adidas risks damaging its brand’s reputation even more, and so this must be performed in a manner that adheres to the respect of its customers. Furthermore, this would take a £443m hit to profit if proceeded to be completely written off. After the termination of the partnership between the sportswear brand and the performer, customers rapidly started purchasing the rapper’s Yeezy designs as they turned into collector items. 


 Alongside having to decide what to do with stock, Adidas is also having to balance a lawsuit after being sued by investors claiming the company was aware of West’s problematic behaviour years before they decided to eventually cut ties with the rapper. Adidas has denounced these claims, 


Despite the financial loss of Yeezy, Adidas reported a higher-than-expected operating profit of sixty million euros at the start of the year due to strong demand for its football, running and tennis shoes, as Mamta Valechha, a research analyst at Quilter Cheviot stated that the company is managing investors expectations’. An operating profit of 60 million euros beat analyst forecast expectation of 15 million alongside experiencing a 1% drop which was originally forecast at 4%. The company expects to return to profit in 2024. 

                                                                                                                                                                    Edited by Aminat Akintobi 

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