Adidas, the German multinational sportswear giant, has reported a significant fourth-quarter operating loss of €724 million ($765 million) and a net loss of €482 million ($510 million) from continuing operations-marking its first annual loss in 31 years. The loss was attributed to the termination of its partnership with Kanye West’s Yeezy brand and a surplus of unsold Yeezy inventory.
Adidas faced a decline in currency-neutral revenues of one percent in the fourth quarter due to the surplus of unsold Yeezy inventory. The partnership was terminated in October 2022 after West made antisemitic comments that went against Adidas’ values of diversity and inclusion, and equality.
Despite these challenges, Adidas executives remain confident in the company’s future. CEO Bjorn Gulden said that 2023 will be a
“transition year”
for the brand, but that Adidas has the potential to regain profitability by 2024. As part of its efforts to reduce costs and improve margins, Adidas will focus on reducing inventories and minimizing discounts.
