Adidas is bracing for a $1.3 billion loss in revenue and $535 million drop in profit in 2023 if efforts to sell off its inventory of Yeezy-branded sneakers fail.
Ye, formerly known as Kanye West, was once synonymous with Adidas. Now the German sneaker giant is dealing with the fallout of ending its partnership with the rapper and fashion designer last year after he made a series of anti-semitic remarks.
The biggest question facing the company is whether it can repurpose its Yeezy products or if it will be forced to write them off, putting a massive dent in revenue and profits. Regardless of the outcome, Adidas is expecting a challenging year ahead.
“The numbers speak for themselves. We are currently not performing the way we should”, said CEO Bjørn Gulden in a news release. “2023 will be a year of transition to set the base to again be a growing and profitable company."
He added that the company will focus on creating "brand heat" and improving its "product engine." "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," he said.
Shares were down around 9 percent in pre-trading on Friday after the announcement.
Charlie Munger, vice chairman of Berkshire Hathaway, told the Financial Times that the U.S. commercial property market is in trouble. “It’s not nearly as bad as it was in 2008,” he said. “But trouble happens to banking just like trouble happens everywhere else.”
Labor strife is coming to a head in the entertainment industry, as the Writers Guild of America (WGA) said it's prepared to strike at midnight Tuesday if it doesn't come to terms with the Alliance of Motion Picture and Television Producers (AMPTP).
Regulators seized troubled First Republic Bank early Monday, making it the second-largest bank failure in U.S. history, and promptly sold all of its deposits and most of its assets to JPMorgan Chase.
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