- Adidas immediately ends its partnership
- Decision to weigh $250 million on 2022 net income
- Adidas sole owner of design rights
Oct 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 by the American rapper and designer.
“Adidas does not tolerate anti-Semitism and any other kind 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, referring to the rapper by his legal name.
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 put the partnership under review 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 restricted, with social media platforms deleting some of his online posts that users condemned as anti-Semitic.
[1/2] Singer Kanye West walks past models after presenting his Fall/Winter 2015 partnership line with Adidas at New York Fashion Week February 12, 2015. REUTERS/Lucas Jackson/File Photo
In now-deleted Instagram posts from earlier this year, the Grammy-winning entertainer accused Adidas and US clothing retailer Gap Inc
He also accused Adidas of stealing his designs for its own products.
Gap and Ye 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 agreed to 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. sport”.
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 3.2%. 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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