- Adidas terminates partnership immediately
- Decided to weigh $250 million in 2022 net income
- Adidas has exclusive design rights
Oct 25 (Reuters) – Adidas SA (ADSGn.DE) said on Tuesday it would immediately terminate its partnership with Kanye West in response to a string of offensive behavior by the American rapper and designer.
“Adidas does not tolerate anti-Semitism and any other type of hate speech,” the German company said.
“Ye’s recent comments and actions are unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness,” it said, using the rapper’s stage name.
A lawyer representing Kanye West did not respond to a request for comment.
The company said the end of the partnership and production of Yeezy-branded products, as well as the cessation of all payments to Ye and his company, would have “a short-term negative impact of up to $250 million” on Adidas’ net income this year, due in part to the Christmas quarter. Greater demand usually arises.
Adidas reviewed the partnership in early October “after several private resolutions”.
Mr Ye has drawn controversy in recent months due to the public end of major corporate partnerships and his outbursts against other celebrities on social media. His Twitter and Instagram accounts were restricted, and the social media platform removed online posts that some of his users denounced as anti-Semitic.
In a since-deleted Instagram post earlier this year, the multi-Grammy-winning artist accused Adidas and U.S. clothing retailer Gap Inc (GPS.N) of failing to build contractual commitments for his Yeezy fashion line permanent store.
He also accused Adidas of stealing his designs for its own products.
Gap and Ye ended their partnership in September. According to media reports, European fashion brand Balenciaga has also cut ties with Ye.
Adidas poached leaves from rival Nike Inc (NKE.N) in 2013 and agreed in 2016 to a new long-term partnership that the company called “the most important partnership between non-athletes and sports brands. relation”.
The partnership, which produced several hot-selling “Yeezy” branded Adidas sneakers priced between $200 and $700, helped the German brand close the gap with Nike in the U.S. market.
Yeezy brings in about 1.5 billion euros ($1.47 billion) in annual sales for Adidas, or just over 7 percent of its total revenue, according to estimates by Telsey Advisory Group.
Shares of Adidas, which cut its full-year forecast last week, fell about 3.8%. The group said it will provide more information in its upcoming third-quarter earnings report on Nov. 3. 9.
Reporting by Mrinmay Dey and Uday Sampath in Bengaluru; Editing by Tomasz Janowski, Sriraj Kalluvila and Bernadette Baum
Our Standard: The Thomson Reuters Trust Principles.