Renowned US singer Kanye West has faced significant financial consequences due to his hateful comments towards the Jewish community. His total losses amount to $1.5 billion, or approximately IDR 22.04 trillion, after German sportswear giant Adidas decided to terminate its partnership with Kanye's Yeezy brand.
Previously, Kanye was listed as a billionaire by Forbes in 2020. However, his reckless actions that angered Adidas have left him with a remaining fortune of only $400 million.
Kanye West's current sources of wealth include cash, real estate, the valuation of his private music catalog, and a 5% ownership stake in the shapewear brand Skims, owned by his ex-wife Kim Kardashian.
Meanwhile, Adidas itself is still uncertain about what to do with the unsold inventory of Yeezy products resulting from their collaboration with Kanye, as they have terminated their contract with the controversial rapper.
The massive loss incurred from the inability to sell Yeezy products is estimated to be around 1.2 billion euros (IDR 20 trillion).
Adidas terminated its partnership with Kanye West in October 2022 after the rapper and fashion designer made a series of controversial and anti-Semitic statements that shocked the internet. This led Adidas to halt the production of the Yeezy line, despite its high demand among consumers.
Adidas anticipates that their operating profit will decrease by approximately 500 million euros if they fail to sell Yeezy products, and they project a high single-digit decline in sales for 2023.
In addition, they estimate one-time costs of 200 million euros to clear out Yeezy inventory, resulting in a total loss of up to 700 million euros in 2023.
Bjorn Gulden, CEO of Adidas, stated that 2023 will be a transition year to build a strong foundation for the future years. "We need to reduce inventory and lower discounts. We can start building a profitable business again in 2024," said Gulden.
On Wednesday (8/3), Adidas also announced a drastic decrease in their net profit by 83% to 254 million euros in 2022.
In addition to the impact from the Yeezy line, Adidas is also facing increased risks of recession in Europe and North America, as well as uncertainty in the economic recovery in China.
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