Leicester City’s kit makers, Adidas, are facing their first annual lost in 30 years following a failed tie-up with rapper Kanye West.
The German sportswear giant reported its annual financial results this week, stating it will slash dividends to shareholders as the company considers how to deal with unsold stock worth £1bn from West’s ‘Yeezy’ range.
The Washington Post reports that Adidas could literally burn £500m worth of Yeezy products. If that stock is indeed written off, it would lead to the company’s operating profit being slashed by £446million and result in an annual loss for the first time since the early 1990s.
The company said underlying operating profit will be “around break-even level,” reflecting the loss of 1.2 billion euros in potential sales from unsold Yeezy stock.Amid the grim financial news, Adidas CEO Bjorn Gulden believes the company can return to profitable growth by 2024 by reducing stocks and cutting discounts. Gulden described the end of the Yeezy deal as “very sad” but the right thing to do. He said he was still deciding what to do about the leftover inventory.