Adidas terminates partnership with Kanye West due to alleged hate speech, potentially forfeiting around $250 million in earnings thisyear.
Adidas has severed ties with fashion designer and musician Kanye West, also known as Ye, following his series of controversial comments and problematic behavior. The sportswear giant will immediately end production of Yeezy branded products and stop all payments to West and his companies, effectively ending the Adidas Yeezy business.
In a statement, Adidas expressed their zero-tolerance policy towards antisemitism and hate speech, stating that West's recent comments and actions were unacceptable, hateful, and dangerous, and violated their values of diversity and inclusion, mutual respect, and fairness.
The abrupt termination of the partnership is expected to have a short-term negative impact of up to €250 million ($246.5 million) on Adidas' net income this year, according to the company's press release. The Yeezy sub-brand represents around 4% to 8% of Adidas' total revenue or 7% to 12% of its footwear sales, as estimated by analysts from Cowen & Co.
The fashion designer's long-standing history of provocative behavior and struggle with corporate culture, stretching back to his brief association with Nike over a decade ago, may have played a role in Adidas' decision. In recent months, West's remarks have become increasingly offensive, with his "White Lives Matter" T-shirt at a Paris fashion show and his endorsement of political stances favored by white supremacists drawing widespread criticism.
In addition, the Anti-Defamation League has called out West for making offensive and conspiratorial claims about Jewish people and Jewish identity in various interviews. After updating their criticism, the group warned that West's comments had been embraced by antisemitic extremist groups.
Recent developments have further highlighted the controversy surrounding West. Over the weekend, white supremacist groups unfurled a banner reading, "Kanye is right about the Jews" and distributed antisemitic flyers in Beverly Hills. On Monday, it was reported that West's agents at CAA had dropped him, while his planned documentary has been shelved, according to Variety.
Adidas' own Nazi history may have played a role in the company's decision, as Kristin Bentz, president of KB Advisory Group, suggested. Bentz observed that Adidas wasn't letting West go due to any legal dispute but rather because his actions violated the company's inclusivity values. Thomai Serdari, a professor of luxury marketing and branding at New York University's Stern School of Business, believes that the move was necessary for Adidas to recapture customer trust, as racist and antisemitic artists do not deserve lucrative contracts. The move, Serdari added, could potentially yield long-term benefits for the company in terms of restoring its reputation.
- Adidas' decision to end its partnership with Kanye West might have been influenced by his long-standing history of provocative behavior, as seen in his controversial comments and actions, which violated the company's values.
- West's recent endorsement of political stances favored by white supremacists and his "White Lives Matter" T-shirt at a Paris fashion show have drawn widespread criticism, potentially contributing to Adidas' decision to terminate the partnership.
- The Anti-Defamation League has expressed concern over West's offensive and conspiratorial claims about Jewish people and Jewish identity, suggesting that these comments have been embraced by antisemitic extremist groups.
- In light of West's problematic behavior and comments, Adidas has taken a firm stand against antisemitism and hate speech, aligning with their values of diversity, mutual respect, and fairness.
- As a result of severing ties with Kanye West, Adidas is expected to experience a short-term financial impact of up to €250 million, according to their press release, but Professor Thomai Serdari believes the long-term benefits in terms of restoring the company's reputation could outweigh these costs.
