Kanye and Adidas has had a tumultuous relationship from the early days of their partnership as the rapper turned designer would publicly air out his business partner for unfair dealings and the brand ultimately severed ties with Ye. A move which is proving to be more detrimental to the sports brand than initially reported.
In the latest developments, on Thursday, Adidas issued a 4th profit warning in as many months that it could face an operating loss of up to €700 million this year due to the company‘s ill–fated partnership with Kanye West that left it with hundreds of millions in unsold Yeezy shoes. The German sportswear maker‘s new CEO, Bjørn Gulden, has said that it will take time to “put the pieces back together“ and that the company needs to “improve our product engine, better serve our distribution and assure that Adidas is a great and fun place to work“.
The sportswear maker has forecast a 1% rise in sales for 2022 and a two–thirds (€669mn)decrease in operating profit. Shares in Adidas have fallen as much as 10% in early trading following the announcement.
Bloomberg reported Yeezy accounted for 40% of Adidas profits which was enough to mask the other unprofitable side f the business.
Yeezy was a huge win for Adidas who Ye chastised for rolling off his designs and putting them on other shoes without the Yeezy approval. The styles copied from the rapper and social media star helped the company to become a leader in footwear and gear for sports such as soccer—to attract a young, hip international clientele that relate to Ye and the culture of Hip Hop and taste making he represents.
Morgan Stanley analyst Edouard Aubin estimates that the Yeezy line has been generating €1.8 billion ($1.8 billion) in annual sales, about 8% of Adidas’s total revenue and more than 40% of the company’s profits.
On Oct. 25, 2022 Adidas released a statement denouncing Ye’s comments as “unacceptable, hateful and dangerous,” after Endeavour CEO Ari Emanual urged all of Ye’s partners to send a stop message. Adding that they violated the company’s values of “diversity and inclusion, mutual respect and fairness.” Beyond that, Adidas has stayed silent, saying it will fill in more details of the Yeezy breakup and future of the partnership’s shoe designs when it delivers quarterly earnings on next Wednesday (Nov. 9).
Emanuel says Ye (formerly Kanye West) should not have business partners and corporation’s “silence is not enough.”
“It’s not enough for Twitter to lock the rapper Kanye West out of his accounts following his anti-Semitic tweet that he was going to go “death con 3 on JEWISH PEOPLE.” West’s business partners across the fashion and entertainment industries also need to speak out and take action.”
Ari, real name Ariel Zev Emanuel’s company is the entertainment and media agency that owns the UFC and represent high profile athletes like Lebron James. He was criticized for not commenting on UFC CEO Dana White’s fight with his wife recently.
He suggests that streaming platforms should also take some action against the “Wait Till I Get My Money Right” rapper to send a strong message.
“Apple and Spotify, which host West’s music, whoever organises West’s tours, and Adidas, which collaborates with West on his fashion line, should all stop working with him. The parent company of Parler, the Twitter competitor, should refuse to sell to West,” he continued in a strongly worded letter in the Financial Times on Wednesday October 19.
Ari, who is an accused racist embroiled and linked to Jeffery Epstein cited Ye’s global dominance in culture and his influence on young people as one reason he should be censored. “West is not just any person — he is a pop culture icon with millions of fans around the world. And among them are young people whose views are still being formed,” the Chicago born Jewish executive wrote.
An April 2002 lawsuit by agent Sandra Epstein against Endeavor Agency brought forth accusations by Epstein and other Endeavor employees against Emanuel. In the court filings, Emanuel is alleged to have allowed a friend to operate a pornographic website out of Endeavor’s offices. According to Epstein, Emanuel made racist and anti-gay remarks and prevented her from sending a script about Navy SEALs to actor Wesley Snipes, saying: “That is the dumbest thing I’ve ever heard. Everyone knows that blacks don’t swim.” Emanuel disputed these accusations at the time. Epstein’s claims were settled for $2.25 million according to the New York Times.
Meanwhile, as Ari is chastising West(Now Ye), he gave film actor Mel Gibson a pass in for the 2006 rants and says he has since recommended Mel for work only after he gave a public apology.
“In 2006, Mel Gibson made an anti-Semitic rant after being pulled over for driving while drunk in Malibu, California. I immediately called on the entertainment industry to refuse to continue working with Gibson. Yes, several years later, I recommended him for roles. But that was only after Gibson’s public apology and his commitment to understanding the consequences of his actions.”
LeBron James who Endeavor represents and his producers pulled the plug on the Kanye West episode of the series The Shop: Uninterrupted because they said he perpetuated hate speech and stereotypes during filming. Maverick Carter, whose production company with James, SpringHill Company, produces The Shop, told Andscape, “After talking to Kanye directly the day before we taped, I believed he was capable of a respectful discussion and he was ready to address all his recent comments. Unfortunately, he used The Shop to reiterate more hate speech and extremely dangerous stereotypes.”
Ari commends James and his team for the action.
Kanye has however blasted other media pawns In a recent video posted on social media, as he calls Dj Akademiks, Charlamagne Da God and Hot 97’s Peter Rosenberg.
I feel like woke culture is not really woke,” Ye said.
“They have bought the black voice but they have not been able to buy my voice,” he continues.
Elsewhere US banking giant JP Morgan Chase is ending its relationship with Kanye who says he banks more than 140 million dollars with the institution.
A letter from the bank informing Mr. Ye of the decision was posted on Twitter by Candace Owens. The bank gave Kanye until 21 November to transfer his business. On his now deleted episode of the Drink Champs, Kanye says P.Diddy told him to buy and bank and he wold be looking into the possibilities of doing same.
