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| Adidas is left with $1.3 bn of unsold Yeezy Stock Photograph: Kanye West/ @Getty Images |
On Wednesday, the German sportswear company announced its yearly financial results, announcing that it will reduce dividends to shareholders while it considers how to cope with the unsold 'Yeezy' goods from the scandalous musician.
If they opt to write down the products, the company's operational profit might be reduced by £446 million, resulting in the company's first yearly deficit in three decades.
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| These are ranges of Yeezy. Adidas is facing its major loss Photograph: @Getty Images |
The German sportwear could actually burn £500 million of the Yeezy collection, which was previously a very popular and very profitable aspect of the athletic business model.
Chloe Collins head of apparel at data firm GlobalData released a statement concerning the companies feasibility. "In Q4, despite Adidas's sponsorship of winning team Argentina, the presence of the FIFA Men's World Cup was not enough to offset the negative impact of the Yeezy controversy on the brand or the fact that its designs lag behind rivals Nike and Puma," she wrote.
"A catastrophic performance in China was partially to blame for Adidas's performance in FY2022, as further lockdowns and a shift to local sportswear brands like Li-Ning and ANTA caused currency-neutral sales to topple 35.8%."
She added: "Adidas is still deciding what to do with its remaining Yeezy inventory, despite reaching an agreement with West allowing the brand to sell it.
"It faces a difficult choice, as selling the stock could damage its brand perception even further, and not selling it will have a disastrous effect on profit."
