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Adidas has received a boost of around €100mn to its operating profit after it unwound a previous provision relating to outstanding legal issues following a scandal with the group’s former partner Kanye West. Chief executive Bjørn Gulden said on Tuesday that the German group, the world’s second-largest sportswear maker, had struck a settlement with West two years after falling out with the rapper, also known as Ye, over a string of antisemitic remarks.
In October 2022 Adidas ditched its fast-growing and lucrative Yeezy line of sneakers, which were designed by Ye, after the remarks. At the time, Adidas said that it did not “tolerate antisemitism and any other sort of hate speech”. The move would eventually wipe out €1.2bn in annual sales and €500mn in operating profit.
In October 2022 Adidas ditched its fast-growing and lucrative Yeezy line of sneakers, which were designed by Ye, after the remarks. At the time, Adidas said that it did not “tolerate antisemitism and any other sort of hate speech”. The move would eventually wipe out €1.2bn in annual sales and €500mn in operating profit.
Gulden said that the group would donate to charity an amount equal to its unwound €100mn provision.
When Gulden joined Adidas from rival Puma in early 2023, the group had been contemplating destroying €1bn of unsold Yeezy stock and writing them off. Instead, Gulden decided to sell them and donate parts of the proceeds to charity.
Including this €100mn the total funds which are earmarked for charity now stand at about €250mn, the company said. Last year Adidas set up an independent non-profit foundation to oversee the distribution of those funds to promote “social and environmental progress”.
