Adidas may lose about $1.3 billion in 2023 if they are not able to sell their current Yeezy stock.
Yeezy is a fashion collaboration between the American rapper, designer, and entrepreneur, Kanye West and the German sportswear brand Adidas.
According to Reuters, the Adidas stated that it was deciding what to do with the inventory and that it had already taken into account the “major adverse impact” of not selling the goods.
This followed the cutting of ties in October between Adidas and the rapper Ye, who is also known as Kanye West.
If the business does not move the products, it is projected that operating profit will fall by about 500 million euros, and Adidas anticipates a high single-digit decline in sales in 2023.
According to CNBC, Adidas may write off its remaining Yeezy products.
As traders reacted to the developments, it was reported that the company’s shares fell 11% on Friday morning.
Adidas additionally anticipated one-time expenses of up to 200 million euros, leaving a 700 million euro loss as the worst-case scenario for the year.
The CEO of Adidas, Bjørn Gulden said in a press release, “The numbers speak for themselves. We are currently not performing the way we should.”