Adidas could be facing their first annual loss in 30 years after a failed tie-up with the rapper formerly known as Kanye West has left them with £1.1bn of unsold stock.The German sportswear brand reported its annual financial results on Wednesday stating it will slash dividends to shareholders as they consider how to deal with the unsold 'Yeezy' products from the controversial rapper.



If they decide to write off the products it could lead to the company's operating profit being lowered by £446million and a first annual loss for the first time in three decades.According to the Washington Post, they could 'literally burn £500m' of the Yeezy range that was once a very popular and highly lucrative part of the sportswear's business model.However, Adidas CEO Bjorn Gulden hopes the company can return to profitable growth by 2024 by reducing stocks and cutting discounts.In a statement Gulden added he is looking to put the 'Yeezy' fiasco behind the company and build the brand with a strategy that balances global direction with local needs, that is fast and agile.

The company's decision to drop West capped the rapper's fall from grace after a pattern of increasingly erratic behavior and anti-Semitic outbursts.In October, he said in a social media post that he would go 'death con 3 on Jewish people', then doubled down in media interviews with comments that included vile remarks about Jewish people.Burning or otherwise destroying the shoes would be the most extreme option - but it is something other fashion brands have done previously, albeit under different circumstances. Luxury brands like Louis Vuitton and Burberry have previously faced criticism for burning unsold stock to preserve brand value.

Adidas' decision to end its lucrative deal with West brought a swift end to sales of his shoes and apparel line.Adidas, which owns the rights to most of the Yeezy line, said after the partnership ended in October 2022 that it was ending production of 'Yeezy branded products and [stopping] all payments to [West] and his companies'.


In November, the company suggested it would continue with the designs, but stripped of the Yeezy name and branding. The announcement prompted speculation the rapper could still be in line for some payments.Following the decision to cut ties with West in October, owners of his Yeezy shoes raced to get rid of his shoes, with searches for the term 'sell Yeezy' skyrocketing almost 600 per cent overnightAdidas have a number of high profile deals elsewhere, including a formerly world record tie-up with Manchester United.