- Adidas immediately ends its partnership
- Decision to weigh $250 million on 2022 net income
- Adidas sole owner of design rights
October 25 (Reuters) – Adidas AG (ADSGn.DE) is ending its partnership with Kanye West immediately, the sporting goods maker said on Tuesday, reacting to a wave of offensive behavior from the American rapper and creator.
“Adidas does not tolerate anti-Semitism and any other type of hate speech,” the German company said.
“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,” he said, using the artist’s name of the rapper.
A lawyer representing Kanye West did not respond to a request for comment.
The end of the partnership and the production of Yeezy-branded products, as well as the cessation of all payments to Ye and his companies “will have a short-term negative impact” of up to $250 million “on the net profit of Yeezy. ‘Adidas this year, the company said, partly because the Christmas quarter tends to see greater demand in general.
Adidas has put the partnership in the study earlier in October “after repeated efforts to resolve the situation privately.”
Ye has courted controversy in recent months by publicly ending major corporate ties and due to social media outbursts against other celebrities. His Twitter and Instagram accounts were limitsocial media platforms removing some of his online posts that users condemned as anti-Semitic.
In now-deleted Instagram posts from earlier this year, the multiple Grammy-winning artist accused Adidas and US clothing retailer Gap Inc. (GPS.N) for failing to build contract-promised permanent stores for products from its Yeezy fashion line.
He also accused Adidas of stealing his designs for its own products.
gap and you ended their partnership in September. European fashion house Balenciaga has also severed ties with Ye, according to media reports.
Adidas poached Ye from rival Nike Inc (NKE.N) in 2013 and entered into a new long-term partnership in 2016 in what the company then called “the most significant partnership ever created between a non-athlete and a sports brand.”
The tie-up, which produced several “Yeezy”-branded Adidas sneakers that cost between $200 and $700, helped the German brand close the gap with Nike in the US market.
Yeezy generates about 1.5 billion euros ($1.47 billion) in annual sales for Adidas, or just over 7% of its total revenue, according to Telsey Advisory Group estimates.
Shares of Adidas, which cut its forecast for the full year last week, fell about 3.8%. The group said it would provide more information as part of its next third-quarter earnings announcement on Nov. 9.
Reporting by Mrinmay Dey and Uday Sampath in Bengaluru; Editing by Tomasz Janowski, Sriraj Kalluvila and Bernadette Baum
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