Faced with mounting public pressure and following a “thorough” internal review, Adidas announced it is immediately ceasing its partnership with rapper and fashion designer Kanye West, also known as Ye, that began in 2013.
The decision, fueled by weeks of public antisemitic remarks by West, will take a financial toll on the German company. Adidas says the short-term negative impact of its decision will be up to €250 million on its FY22 profits. The company is immediately ceasing production of Yeezy-branded products and stopping all payments to Ye and his affiliated firms. “Adidas will discontinue the Adidas Yeezy business effective immediately,” the company said on Tuesday, Oct. 25. Investment house Evercore ISI estimated that the brand’s Yeezy line represents $1 to $2 billion in annual sales for Adidas. The company confirmed that it is the sole owner of all design rights to existing products and previous and new colorways, perhaps foreshadowing potential legal action over ownership of the Yeezy footwear business from Ye.
“Adidas does not tolerate antisemitism and any other sort of hate speech,” the company said concisely in its official statement. “Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.”
The group has taken heat in the press, on social media and by the public in recent days for being among the last of Ye’s corporate partners to terminate its relationship with him. Late last week, French fashion house Balenciaga stepped away from West, followed by Hollywood talent agency CAA and West’s documentary producer MRC. Last month, retailer Gap said it would no longer open standalone Yeezy stores.
Anti-Defamation League CEO Jonathan Greenblatt told the Washington Post that he had conversations with Adidas senior executives and shareholders over the weekend and received an “insufficient” response from the company.
Meanwhile, Endeavor Entertainment CEO Ari Emanuel, in a Financial Times editorial, wrote, “Those who continue to do business with West are giving his misguided hate an audience. There should be no tolerance anywhere for West’s antisemitism. This is a moment in history where the stakes are high and being open about our values, and living them, is essential. Silence and inaction are not an option.”
But the West situation could not come at a more inopportune time for Adidas. The company, which last week said its annual profits would be approximately 60 percent lower than prior expectations, is dealing with a difficult business in China, an apparent glut of excess inventory (particularly in apparel) and the need to find a replacement for CEO Kasper Rorsted who is leaving in 2023.
Adidas promises more details on its ongoing Yeezy business during its third-quarter earnings announcement on Nov. 9.
Photo by Kyle Brinker on Unsplash
