Adidas has suffered a major sales hit due to the ending of its collaboration with Kanye West, which the sportswear giant said has “hurt” its business. Adidas cut ties with the rapper and designer, known as Ye, after he posted anti-Semitic comments on social media last year. West designed trainers under the Yeezy brand and Adidas said that the loss of the business cut sales by €400m (£350m) in the first quarter of this year. Despite the dip, the company reported better-than-expected figures, with total revenue down by only 1%.
Adidas said it was benefiting from the current trend for “terrace” style trainers and was seeing “extraordinary demand” for its Samba, Gazelle and Campus brands. The sportswear giant plans to increase production of such shoes in the coming months after having a limited supply at the start of the year. However, sales in North America fell by 20%, with the region being particularly affected by the loss of the Yeezy business.
Adidas CEO Bjorn Gulden said the loss of Yeezy is “of course hurting us”. The company still has to decide what to do with the remaining unsold Yeezy stock, and whether it will sell them or scrap them. If it decided not to “repurpose” the stock, this would hit the company’s operating profit by €500m this year. Adidas is currently being sued by investors who claim the firm knew about West’s problematic behavior before ending their partnership.
Looking ahead, Gulden warned that 2023 would be “a bumpy year with disappointing numbers”, but Adidas is aiming to make sure that 50% of the products it sells in China are designed specifically for the Chinese market. Despite sales in China being down 9.4% from a year earlier, Adidas reported a higher-than-expected operating profit of €60m, with strong demand for its football, running and tennis shoes helping footwear revenues grow by 1%.
