Adidas ends cooperation with Kanye West after anti-Semitic comments

Adidas has severed ties with rapper and fashion designer Kanye West and condemned his anti-Semitic remarks, which is expected to cut the sportswear maker’s profits in half this year.

The German company said it does not “tolerate anti-Semitism and any other form of hatred”, adding that it would end the partnership “immediately”.

The decision came after West, now known as E, said in a recent interview that he could “say anti-Semitic things and Adidas wouldn’t be able to drop me.”

“Ye’s recent comments and actions were unacceptable, hateful and dangerous and violate the company’s values ​​of diversity and inclusion, mutual respect and fairness,” said Adidas.

The world’s second-largest sportswear maker expects to cut net profit to 250 million euros this year, and its shares fell nearly 6 percent on Tuesday. Last week, the company issued its second profit warning in three months, saying it expected net income to reach 500 million euros in 2022.

The profit drop points to “excellent profitability for the Yeezy franchise,” Jefferies analyst James Grzynik said. “After all, earnings challenges have clearly increased in 2023 following this update,” he said in a note to clients.

The company, which developed and sold adidas Yeezy-branded sneakers alongside West for nearly a decade, said it would “discontinue production of Yeezy-branded products and cease all payments to Y and his companies.”

The relationship between Adidas and West was already strained. He previously accused the retailer of stealing his designs in a since-deleted Instagram post. He also claimed that the company offered him a $1 billion buyout to get him out of the partnership.

Adidas followed Kering’s Balenciaga, which dropped West earlier this month after the rapper made controversial statements.

The spate of offensive remarks began during Paris Fashion Week earlier this month when West wore a shirt that read “White Lives Matter.”

He also claimed during a recent podcast interview with Drink Champs, which has since been deleted, that Jews “have the black voice” because all the famous black people “are signed to a record label, or have a Jewish manager, or signed to a Jewish basketball team team or made a film on a Jewish platform, such as Disney.”

Adidas’ decision comes as the brand searches for a successor to chief executive Kasper Rørsted, who announced his early retirement this summer after some major shareholders were unhappy with his performance.

The Yeezy line of sneakers has become a significant source of sales and profits for Adidas. Although the company does not disclose figures, analysts believe that it accounts for 8% of total sales.

Adidas put its longstanding relationship with the West under review earlier this month after “repeated efforts to resolve the situation privately,” the company said in a statement.

Back in 2016, the company said that working with West was “the most significant partnership ever created between a non-athlete and a sports brand.” On Tuesday, the group said it was the “sole owner of all design rights for existing products, as well as previous and new color solutions within the partnership.”

On the eve of the decision, the Central Council of German Jews slammed the campaign. “I know sneakers are big business, but when it comes to anti-Semitism, it can’t be an obstacle to doing the right thing,” board president Josef Schuster told the Financial Times, calling the issue “a litmus test for the company.” “.

Schuster also noted Adidas’ historical responsibility for the German company being “linked to and profiting from the Nazi regime.”