// Adidas profits drop after terminating relationship with rapper Kanye West
// The sportswear giant recorded a gross profit of £9.45bn for the 12 months to December 31, 2022, 1% less than the £9.54bn it made in 2021
Adidas profits drop for the financial year 2022 after terminating its Yeezy partnership with Kanye West, as it warns of a £14.2m payout following the early departure of CEO Kasper Rorsted.
The sportswear giant recorded a gross profit of £9.45bn for the 12 months to December 31, 2022, 1% less than the £9.54bn it made in 2021
Rorsted’s exit will cost Adidas £14.2 million. The Danish national, who left the German sportswear maker in November almost four years before the end of his contract, will receive a severance payment of £10.6m.
In addition, he will receive around £3.2m as compensation for not joining a competitor within the next 18 months, as well as his remaining salary of around £267,193 for November and December.
Adidas’ EBITDA fell to £1.6bn, down 39% from the previous year. Operating profits dropped 66% to £596.32m. Net sales increased 6% to £20bn year on year.
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The trading update comes after Adidas’ profit guidance announcement earlier this year when it warned of a “significant impact” and reduced profits after it cut ties with Yeezy over West’s antisemitic comments.
Adidas AG chief executive Bjørn Gulden said: “We need to focus on the core of our business, which is design, development, sourcing, marketing, selling and delivering product.
“We should never forget that we are a shoe, apparel, and accessories brand that sells physical product. Everything around that should support this, so right now that means focusing on the product, on how we go to market and being the most service-minded organisation both to our retail partners and the consumer.
“We should be the most-liked brand by both athletes and by those who are influential in our business. We need to create the best product and must always remember that our consumers – although informed globally – still think and act locally.”
