Adidas has cut ties with rapper and fashion designer Kanye West and condemned his anti-Semitic remarks, in a move that is expected to halve the sportswear maker’s profits this year.
The German company said it did not “tolerate anti-Semitism and any other sort of hate speech”, adding that it would end the partnership “immediately”.
The decision comes after West, now known as Ye, said in a recent interview that he could “say anti-Semitic things and Adidas can’t drop me”.
“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,” said Adidas.
The world’s second-largest sportswear maker expects to take an up to €250mn hit to net profit this year, with its shares trading down almost 6 per cent on Tuesday. Last week, it warned on profit for the second time in three months, saying net income was expected to reach €500mn in 2022.
The slump in profit pointed to “remarkable profitability for the Yeezy franchise”, said Jefferies analyst James Grzinic. “Ultimately, after this update, the 2023 profit challenges have clearly increased,” he said in a note to clients.
The company, which developed and sold sneakers under the Adidas Yeezy brand with West for almost a decade, said it would “end production of Yeezy branded products and stop all payments to Ye and his companies”.
The relationship between Adidas and West was already strained. He previously accused the retailer of stealing his designs in a now-deleted Instagram post. He also claimed that he was offered a $1bn buyout by the company to walk away from their partnership.
Adidas’s move follows that of Kering’s Balenciaga, which ditched 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 said “White Lives Matter”.
He also claimed during a recent podcast interview with Drink Champs, which has since been removed, that Jewish people “own the Black voice” because of all the prominent Black people “being signed to a record label, or having a Jewish manager, or being signed to a Jewish basketball team, or doing a movie on a Jewish platform like Disney”.
Adidas’s decision comes as the brand searches for a successor to chief executive Kasper Rørsted, who announced his early departure this summer after some large shareholders became dissatisfied with its performance.
The Yeezy line of sneakers has turned into a significant source of sales and profit for Adidas. While the company does not disclose the figures, analysts estimate it accounts for 8 per cent of total sales.
Adidas put its longstanding tie-up with West under review earlier this month after “repeated efforts to privately resolve the situation”, the company said in a statement.
Back in 2016, it said its work with West was the “most significant partnership created between a non-athlete and a sports brand”. The group said on Tuesday it was “the sole owner of all design rights to existing products as well as previous and new colorways under the partnership”.
Ahead of the decision, the Central Council of Jews in Germany had lambasted the company. “I know sneakers are a big business, but on an issue of anti-Semitism this is cannot be an obstacle for doing the right thing,” the council’s president Josef Schuster told the Financial Times, calling the issue “a litmus test for the company”.
Schuster also pointed to Adidas’s historic responsibility as the German company had been “enmeshed with the Nazi regime and benefited from it”.