Adidas has warned that their split with Kanye West could put them in a position of its first annual loss in three decades. The split has cost Adida $632 million in sales in the fourth quarter of 2022 alone which is equivalent to R 11 740 158 400,00.
Sportswear firms have been known for working with celebrities for years and the deals however lucrative are potentially risky because once that particular individual separates from your brand, you will definitely lose customers.
New Chief Executive of Adidas, Bjorn Gulden said to the press on Wednesday that Adidas will continue to partner not just with athletes but also celebrities and artists.
“It’s a matter of either/or, you have to do both, Gulden said. You can build credibility as a performance brand by being with athletes but there’s very few athletes that you can do lifestyle with.
Gulden did, however hint at a change of emphasis at Adidas saying that the company needs to refocus on its core: “You will see us invest in more sports and be wider again than we have been because that is also the DNA of the company.”
The partnership between Adida and Kanye West was set to expire in 2026 with it bringing in over $1.7 billion in revenue in the year 2022. The partnership was ended by Adidas in October after Kanye West posted offensive posts which saw him suspended from Instagram and Twitter.