Key Takeaways:
- Adidas announced that it was severing ties with rapper Ye immediately.
- The move resulted from Ye's offensive public comments in recent weeks.
- Other companies have already shunned Ye, or are likely to do so soon.
PATNA (CoinChapter.com) — Sports equipment giant Adidas has announced its decision to end its partnership with rapper Ye, formerly Kanye West, with immediate effect.
The decision came on the heels of a spade of offensive and rash behavior by the musician, which involved a series of offensive and antisemitic comments. The German firm would take a $250.8 million (€250 million) hit to its net income in the current fiscal year after breaking the deal with Kanye West.
adidas does not tolerate antisemitism and any other sort of hate speech. 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.
Adidas said in its statement
Meanwhile, the termination of the contract would mean Adidas ending the production of Yeezy-branded products and end of all payments to Ye and his companies. The sports giant had partnered with Ye to build the Yeezy line, which after a decade, accounted for nearly 8% of Adidas’s total sales.
Ironically, Adidas had recently termed its partnership with Kanye West “one of the most successful collaborations in our industry’s history.”
Moreover, the slew of offensive comments has resulted in a hit to Kanye West’s net worth. Per a Forbes report, the end of the Adidas-Kanye West partnership means the rapper’s net worth dropped to $400 million.
The Adidas partnership added about $1.5 billion to Kanye West’s net worth.
What Did Kanye West Do?
Apart from the recent scandal, Kanye and Adidas have had a lot of friction over the years. For example, Kanye West accused the sports giant of copying his ideas and tried negotiating a 20% royalty in perpetuity contract for all the shoes he designed with the company.
Additionally, the rapper appeared at the Paris Fashion Week wearing a t-shirt that said “White Lives Matter.”
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The move invited harsh criticism from different circles. The musician later got banned on Twitter and Instagram for repeatedly posting antisemitic remarks.
The Anti-Defamation League, StopAntisemistism, and the International Legal Forum applauded the move by Adidas on Tuesday.
Not Just Adidas, Others Took Action Against Kanye As Well
Hours after Adidas’s announcement, Gap and Foot Locker released separate statements announcing their decision to remove Yeezy products from their stores.
Gap had announced in Sept that it was ending its partnership with Kanye West but would sell its remaining Yeezy inventory. However, after Adidas’s announcement, the company said it would immediately remove Yeezy products.
Antisemitism, racism and hate in any form are inexcusable and not tolerated in accordance with our values
Gap said in a statement.
Furthermore, the apparel chain has shut down the YeezyGap website, which now redirects to the Gap website. Kanye West’s recent comments and actions also led to Foot Locker kicking out Yeezy merchandise from its stores immediately.
The company said it would carry other Adidas products, but none with the Yeezy label. Furthermore, Balenciaga also announced its decision to part ways with Ye.
Following the publication of its Q3 results, Balenciaga’s parent company Kering said the French fashion house would no longer work with Kanye West, thanks to his increasingly controversial public comments.
Hence, it is likely Kanye West’s net worth, already suffering a major hit from the end of the Adidas-Kanye partnership, would drop further after losing contracts from other companies.
Adidas Stock
Adidas’s association with Kanye West is just one of its worries, with the German firm still looking for a new CEO to take over next year. Moreover, Adidas has lowered its earnings forecast multiple times this year.
Adidas stock has been trending downward for nearly a year now. News about the company’s dissociation with the disgraced rapper might have added bullish tailwinds to the firm’s shares, with ADDYY prices jumping 6% intraday on Oct 26.
However, the macroeconomic headwinds coming out of Europe and North America, coupled with falling demand in China and other markets, might mean Adidas would have to wait a while before seeing an uptrend.
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