Shares of German footwear and apparel giant Adidas slid Tuesday after it disclosed a nine-figure loss after breaking off its relationship with rapper Kanye West following his anti-Semitic tirades, an ill-timed public relations nightmare for the firm founded by a Nazi Party member whose stock was already falling due to slumping sales.
Adidas shares fell 6.1% to $97.46 in Frankfurt after the company dumped West.
West’s Yeezy line brought in an estimated $2 billion in sales annually for Adidas, according to Morningstar analyst David Swartz—about 10% of its total revenue.
The company disclosed an estimated $247 million loss for 2022 Tuesday, yet another brutal revision after the company slashed its 2022 profit margin expectation from 7% to 4% Thursday due to a glut of inventory and a deterioration in China sales.
The stock is now down 15% over the last five days.
Shares of rival Nike are up 1.3% in the period and Evercore ISI analyst Omar Saad said the “divergence appears to be widening” between the retailers.
Adidas said October 6 it placed its partnership with West under review after the rapper wore clothing associated with a white supremacist group at his Yeezy fashion show in Paris, but did not make any public comment on West until Tuesday. Luxury retailer Balenciaga cut ties with West Friday, while his talent agency CAA dropped West Monday.
275 times more. That’s how much more Adidas paid West annually compared to its chief executive Kasper Rorsted. Adidas paid West $220 million per year, according to our estimates, while Rorsted brought home about $8 million last year.
Adidas’ cofounders, brothers Adolf and Rudolf Dassler, were both early members of the Nazi Party.