Adidas has warned of a potential major impact on its profits after ending its partnership with rapper and fashion designer Kanye West last November.

The firm's new boss said it could lose hundreds of millions of dollars this year if it decides not to sell its stock of Yeezy sneakers.

The sportswear giant cut ties with West, known as Ye, after he posted anti-Semitic comments on social media.

The announcement marks the company's fourth profit warning since July.

"The numbers speak for themselves. We are currently not performing the way we should," Adidas' chief executive Bjørn Gulden, said in a statement.

Adidas said it was still deciding whether to scrap its remaining Yeezy stock and would take a €500m (£443m) hit to its profits if it is all written off.

The company also expects a shake-up of the business to cost a further €200m. That could mean Adidas is pushed into a €700m operating loss this year. Although the company expects to return to profit in 2024.

At the same time the company revealed that its profit for last year had fallen to €669m.

In October, the company announced that it was ending the highly profitable partnership with West after he caused an outcry over his anti-Semitic comments.

While the decision to end its partnership with Yeezy had a major negative impact on Adidas, it has also faced other challenges over the last year.

Mr Gulden joined Adidas at the start of this year from rival Puma after his predecessor was ousted in the wake of a series of profit warnings.

In March, the company announced that it would close its shops in Russia and suspend its online store there as it joined a raft of global brands that pulled out of the country in the wake of the invasion of Ukraine.

The firm's business in China was also impacted by Beijing's strict zero Covid measures that saw major cities across the country put into lockdown.

Source:
courtesy of BLOOMBERG

by Monica Miller | BBC News

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