Adidas AG slashed its dividend and offered no concrete plans for disposing of $1.3bn in Yeezy gear as new Chief Executive Officer Bjorn Gulden tries to turn around the crisis-beset German sports brand.
et the CEO aims to return the company to profitable growth in 2024 by reducing inventories of products and cutting discounts, Adidas said Wednesday, affirming its gloomy outlook for this year.
If Adidas writes off the unsold Yeezy products, old versions of which continue to fetch high prices on sites like eBay, it would lower the company's operating profit by €500m ($527m) and lead to Adidas's first annual loss in more than 30 years.
In October, Adidas cut ties with the rapper and designer Ye, formerly known as Kanye West, after he unleashed a string of hateful and antisemitic rhetoric.
Gulden is looking to pivot beyond the Yeezy fiasco and build brand heat again with a strategy that "balances global direction with local needs, that is fast and agile," he said in the statement.
Catering products to local markets is becoming a particularly urgent problem in China, once Adidas's growth engine. Sales in the Asia-Pacific region plunged 31pc in 2022, in large part because Adidas failed to overcome the country's widespread boycotts of western brands.
Adidas proposed slashing the annual dividend by 79pc to 70 cents.