German sportswear brand faces €250 million hit
Adidas is ending its partnership with Ye following a slew of public decries and offensive behavior from the multi-billionaire designer.
The German sports company announced that it’s cutting ties with Ye, formerly Kanye West, with immediate effect Bloomberg reports. As a result the company will take a hit of as much as €250 million ($246.5 million) to net income in the current fiscal year.
“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,” the company said in a statement.
Adidas will terminate the partnership with Ye, end production of Yeezy branded products and stop all payments to Ye and his companies, it said.
Adidas joins Gap Inc. and Balenciaga fashion label in announcing their departure from Ye. The rapper has made controversial statements on social media and said he wanted to cut ties with all his corporate partners including his record label and reclaim his publishing and masters.
Adidas shares, went down by 4.5% in Frankfurt trading, reaching the lowest since 2016.
The Adidas decision follows weeks of deliberations inside the company, which over the past decade has built the Yeezy line — together with Ye — into a brand that’s accounted for as much as 8% of Adidas’s total sales, according to several estimates from Wall Street analysts.
The German company said it’s the “sole owner of all design rights to existing products, as well as previous and new colorways,” under the partnership. It plans to offer more details as part of third-quarter earnings on Nov. 9.
Adidas earlier this month had called the partnership “one of the most successful collaborations in our industry’s history” and said it would continue co-managing Yeezy products during its review.
That success, however, came with plenty of acrimony between the partners. Ye has accused Adidas of copying his ideas and mismanaging the brand, and taunted outgoing Chief Executive Officer Kasper Rorsted on social media. Meanwhile, Adidas has said it repeatedly tried and failed to resolve issues with Ye privately.
Ye had been vocal about how the German sportswear giant has not been gaining his approval for certain brand activations including YEEZY Day. He expressed his criticism on social media and named Senior Vice President/General manager Daniel Cherry III as a target.
The rapper also claimed that the German sportswear company offered him a $1 billion USD buyout.
“The fact [adidas] felt they could color my shoes and name them without my approval is really wild,” Ye shared in an Instagram post. Adding, “I really care about building something that changes the world and something I can leave to my kids. They tried to buy me out for 1 billion dollars [USD]. My royalties next year are 500 million dollars [USD] alone.”
Ye has now taken to Instagram another time to lay out potential plans he has for the future. Highlighting the uncertainty of his relationship with adidas, Ye touched on his desire to take over a shoe company or factories for the construction of footwear. Launching an open call for a shoe company that will let him become the head of the board and “chief decision maker.”
In a follow-up Instagram post, Ye shared a screenshot showing a link to San Antonio Shoemakers’ Wikipedia page. Also known as SAS Shoes, the family-owned American shoe manufacturer based in San Antonio, Texas specializes in handcrafted men’s and women’s shoes. The post was simply accompanied by “: ).”
Stay tuned to WMV for more developments on Ye’s next fashion moves.
