Billions of dollars in revenue were wiped out at the world’s two largest sportswear companies due to antisemitism scandals over the past two weeks, leaving executives to survey the damage as the dust settles at Adidas AG and Nike Inc.
The road back to normalcy will be much rockier for Adidas than for its longtime rival. Its breakup with rapper and designer Ye, formerly known as Kanye West, over his outbursts ended one of the most lucrative sneaker arrangements in the industry’s history and leaves a gaping hole in the company’s earnings that may be as large as €250 million ($251 million). Nike’s suspension of its shoe line with basketball star Kyrie Irving after he refused to disavow antisemitism presents a less painful headache.
Adidas faces crises on multiple fronts as it prepares for a leadership change with CEO Kasper Rorsted on the way out. His successor will now have to figure out how to sell Yeezy designs to customers without the brand name and whether to rethink celebrity partnerships, all while contending with global supply-chain snags and declining market share in China.