adidas Could Lose $1.29 Billion If It Sits On Unsold Yeezy Stock

When adidas ended its deal with Ye (formerly Kanye West) in October, it was clear that the sneaker scene would never be the same again. However, it seemed that Yeezy styles wouldn’t disappear forever, as the 3-Stripes announced that it was still planning to sell remaining Yeezy stock, albeit no longer under the Yeezy name. While sneaker fans debated the decision among themselves, it quickly became apparent that adidas had made the call with its financials in mind, as the true cost of the split started to sink in.

In a statement, the German giant admitted that it expects a high single-digit decline in sales in 2023, and that refusing to sell the remaining Yeezy stock could cost it 1.2 billion euros in reduced revenue. Furthermore, it was revealed that writing off the inventory would lead to an extra 500 million euro loss in operating profit, as well as one-off costs of 200 million euros to help the brand get back on track ahead of 2024. If this scenario was to materialise, it would mean a 700 million euro operating loss during 2023.

Speaking on the situation, new CEO Bjørn Gulden said: “The numbers speak for themselves. We are currently not performing the way we should. “2023 will be a year of transition to set the base to again be a growing and profitable company. We will put full focus on the consumer, our athletes, our retail partners and our adidas employees. Together we will work on creating brand heat, improve our product engine, better serve our distribution and assure that adidas is a great and fun place to work. adidas has all the ingredients to be successful: A great brand, great people, fantastic partners and a global infrastructure second to none. We need to put the pieces back together again, but I am convinced that over time we will make adidas shine again. But we need some time.”

What’s next for the 3-Stripes? Will we finally start to see unbranded Yeezys hit the shelves? Or will the brand speed up its Samba restocks in an attempt to cover the costs? Be sure to keep it locked to The Sole Supplier for more news on the situation.

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