Adidas has cut ties with rapper and fashion designer Kanye West and condemned his anti-Semitic comments, in a move that is expected to slash the sportswear maker’s profits in half. in this year.
The German company said it “does not tolerate anti-Semitism and any other kind of hate speech”, adding that it will end the partnership “immediately”.
The decision comes after West, now known as Ye, said in a recent interview that he can “say anti-Semitic things and Adidas can’t leave me.”
“Ye’s recent comments and actions are unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fair,” said Adidas.
The world’s second-largest sportswear maker is expected to rake in a net profit of up to €250 million this year, with its shares trading down nearly 6% on Tuesday. Last week, it warned of profit for the second time in three months, saying net income is expected to hit 500 million euros in 2022.
Jefferies analyst James Grzinic said the drop in profits shows “significant profitability for the Yeezy franchise”. “Finally, following this update, the 2023 profitability challenges have clearly increased,” he said in a note to clients.
The company, which has been developing and selling sneakers under the Adidas Yeezy brand with West for nearly a decade, said it would “cease production of Yeezy-branded products and cease all payments to Ye and other brands.” his company”.
The relationship between Adidas and West is already strained. He previously accused the retailer of stealing his designs in a now-deleted Instagram post. He also stated that he was offered a $1 billion buyback by the company to leave their partnership.
Adidas’ move follows Kering’s Balenciaga, which abandoned West earlier this month after the rapper made controversial statements.
The barrage of offensive comments began during Paris Fashion Week earlier this month, when West wore a shirt that read “White Lives Matter”.
He also claimed in a recent podcast interview with Drink Champs, later deleted, that Jews “possess a Negro voice” because all prominent blacks “are contracted.” signed to a record label, or had a Jewish manager, or signed a contract with a Jewish basketball team, or made a film on a Jewish platform like Disney”.
Adidas’ decision comes as the brand is looking for a successor to chief executive Kasper Rørsted, who announced his early departure this summer after several major shareholders were unhappy with its performance.
The Yeezy line of sneakers has become a significant source of revenue and profit for Adidas. Although the company does not disclose figures, analysts estimate it accounts for 8% of total sales.
Adidas reviewed its long-term relationship with West earlier this month after “repeated efforts to resolve the situation privately,” the company said in a statement.
Back in 2016, they said their work with West was “the most important partnership created between a non-athlete and a sports brand”. On Tuesday, the group said it was “the sole owner of all design rights to the existing products as well as the previous and new colors in the partnership”.
Prior to this decision, the Central Council of German Jews criticized the company. Council chairman Josef Schuster told the Financial Times: “I know sneakers are big business, but on the issue of anti-Semitism, this should not be an obstacle to doing the right thing,” the council’s chairman said. Josef Schuster told the Financial Times, calling the issue “a test for the company. “.
Schuster also points to Adidas’ historical responsibility as the German company “had a hatred for the Nazi regime and benefited from it”.
