German sportswear giant Adidas has reported a return to profitability after selling off its remaining "Yeezy" stocks, finally drawing a line under its controversial partnership with the rapper Ye, formerly known as Kanye West.
But the financial upturn won't save hundreds of jobs that are still due to be cut at the company's headquarters in Herzogenaurach, Bavaria.
Adidas cut ties with Ye in October 2022 after the artist made a series of racist and antisemitic public comments. The split severely dented revenues from its lucrative "Yeezy" sneaker collaboration and contributed to a net loss of €58 million ($62 million) in 2023, the company's first negative result in 30 years.
One year on, however, the Bavarian sports firm is back on track, reporting an 11% increase in turnover to around €23.7 billion and a net profit of €832 million.
"We have every reason to set a target of becoming the number one in every market in the world — perhaps with the exception of the United States," said chief executive Björn Gulden.
Adidas confirms plans for hundreds of redundancies
However, that global vision looks set to have local consequences, with Adidas also confirming on Wednesday that hundreds of jobs could be lost at its German HQ.
"We have to cut up to 500 jobs because these positions — not the people — create complexity," claimed Gulden at a press conference following the announcement of the 2024 profits.
"We have to reduce complexity," he said, explaining that decisions as to what sells well in the United States or China cannot continue to be made in Bavaria. "We've have to break many of our own rules."
Adidas 'Yeezy' collaboration was big in US
The termination of the Yeezy range has hit Adidas particularly hard in the US, where the sneakers were popular and where overall sales were still down 2% in 2024, "solely due to significantly lower 'Yeezy' sales," the company said.
In 2023, Adidas had made €750 million in revenue from its "Yeezy" inventory alone, generating an operating profit of €300 million. In 2024, the process of liquidating remaining "Yeezy" stock still generated around €200 million – but much of the profits were donated to organizations and charities combating antisemitism, such as the Anti-Defamation League (ADL).
Adidas targeting Nike, markets not convinced
Now, after legal battles over the split with Ye were ended in autumn last year, "We owe him nothing more and he owes us nothing more," said Gulden at the time.
Adidas is looking to resume its commercial battle with American rivals Nike.
According to data cited by the dpa news agency, the Herzogenaurach-based firm increased its market share from 8.2% to 8.9% in 2024, while Nike suffered a drop from 15.1% to 14.2%.
Nevertheless, despite the return to profitability, the markets still saw room for improvement, with Adidas shares on Germany's DAX stock exchange down by between 3.5% and 3.9% on Wednesday morning.
