Sports giant Adidas’ earnings have reportedly dropped after ending their Yeezy brand partnership with Kanye West.
According to the Associated Press, Adidas revealed that its net profit from continuing operations dropped from an expected $500 million euros ($510 million USD) to $250 million euros ($252 million USD) in earnings. The reported numbers align with the news of Ye’s split from the sportswear brand, possibly costing it a quarter-billion in profits. However, the reports clash with Adidas CFO Harm Ohlmeyer’s claims that the Yeezy brand partnership’s impact on the sportswear giant’s increase in success was “overstated.”
Adidas famously teamed up with West to create his uber-popular Yeezy sneakers and slides back in 2015. His shoes were an automatic hit with fans and fashion lovers and have since been worn and collected regularly by young men and women. Just a few years later, the brand reportedly cut ties with him after he made explosive statements on social media.
Ohlmeyer additionally said Adidas will try to offset the breakup’s impact by 2023 by no longer having to pay marketing fees and royalties for the brand. He also said the breakup won’t have long-term consequences on the company beyond 2023.
“It does not include any further central cost allocation for sourcing, digital, retail, or any other services that this part of our business has been benefitting from and that were essential for its success,” the executive said. “At the same time, we will save around 300 million euros related to royalties and marketing fees; in combination, this will help us to compensate the majority of the top and bottom line impact in 2023.”
Adidas reportedly retained ownership of the designs associated with the Yeezy brand collab, but they don’t own the name. Financial analysts said both West and the Yeezy brand were responsible for 15% of Adidas’ total net income.
In the meantime, West fans have been busy sharing their favorite sneakers and outfits in memory of the collaboration via an Instagram page dedicated to it.
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