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shooting yourself in the foot...
WEDNESDAY, MAR 08, 2023 - 10:45 AM
Adidas announced on Wednesday that it would slash its dividend by 79% because severing ties with "Yeezy" designer Kanye West has decimated earnings to the tune of $1.3 billion.
Adidas terminated its partnership with Ye in October, after the rapper formerly known as Kanye West repeatedly made antisemitic comments on social media.
The Yeezy line accounted for 7% of Adidas' total sales last year according to analysts from S&P Global Ratings.
"2023 will be a transition year to build the base for 2024 and 2025," said Bjørn Gulden, who took over as Adidas's CEO in January, and promised to rebuild the company's reputation. "We need to reduce inventories and lower discounts. We can then start to build a profitable business again in 2024."
As FT notes, Gulden is disinclined to burn the shoes or give them away, both of which would entail a €500mn write-off. Instead, he suggested selling the trainers and donating the profits to charity.
"We will bring it back to be the best sports brand in the world once again," he added.
Adidas To Cut Dividend 80% After Losing $1.3 Billion Severing Ties With Kanye West
BY TYLER DURDENWEDNESDAY, MAR 08, 2023 - 10:45 AM
Adidas announced on Wednesday that it would slash its dividend by 79% because severing ties with "Yeezy" designer Kanye West has decimated earnings to the tune of $1.3 billion.
Adidas terminated its partnership with Ye in October, after the rapper formerly known as Kanye West repeatedly made antisemitic comments on social media.
The Yeezy line accounted for 7% of Adidas' total sales last year according to analysts from S&P Global Ratings.
"2023 will be a transition year to build the base for 2024 and 2025," said Bjørn Gulden, who took over as Adidas's CEO in January, and promised to rebuild the company's reputation. "We need to reduce inventories and lower discounts. We can then start to build a profitable business again in 2024."
As FT notes, Gulden is disinclined to burn the shoes or give them away, both of which would entail a €500mn write-off. Instead, he suggested selling the trainers and donating the profits to charity.
"We will bring it back to be the best sports brand in the world once again," he added.
Adidas To Cut Dividend 80% After Losing $1.3 Billion Severing Ties With Kanye West | ZeroHedge
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