United States: Adidas has raised concerns about a potentially significant impact on its profitability After severing its collaboration with musician and fashion designer Mr. Kanye West in November 2022. The company could lose hundreds of millions of dollars this year if its stock of Yeezy sneakers is not sold, according to the new leader of the company.

The sportswear giant cut ties with Mr. West, known as Ye after he posted anti-Semitic comments on social media. The company has issued a profit warning four times since July 2022 with this announcement.

“The numbers speak for themselves. We are currently not performing the way we should,” Adidas’ chief executive Mr. Bjørn Gulden, cited in a statement. Adidas stated that it was still deciding whether to trash its remaining Yeezy stock and that doing so would cost the company $526 million in lost profits.

The company estimates that restructuring the business will cost an additional $210 million. This might cause Adidas to experience an operational loss of $737 million this year. Nevertheless, the business anticipates turning a profit in 2024.

The firm also noted that its profit for the previous year had decreased to $704 million. Adidas experienced other difficulties over the past year in addition to the decision to stop its collaboration with Yeezy, which had a significant negative effect on the company. After his predecessor was fired as a result of a string of profit warnings, Mr. Gulden transferred from rival Puma to Adidas at the beginning of this year.

The company, which joined a host of international companies that withdrew from Russia in the wake of the invasion of Ukraine, said in March that it would shut down its physical locations there and cease operations for its online store. Beijing’s draconian zero COVID policies, which resulted in the lockdown of major cities nationwide, had an adverse effect on the company’s business operations in China.

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