Kanye West accused of being anti-semitic, loses about RM7 billion in the deal and more with other brands
HERZOGENAURACH – Adidas AG (ADSGn.DE) ended its partnership with rapper and fashion designer Kanye West aka ‘Ye’ on Tuesday after he made a series of antisemitic remarks, knocking him off Forbes’ list of the world’s billionaires.
This month, Adidas reviewed the collaboration, which has resulted in several hot-selling Yeezy-branded sneakers.
“Adidas does not tolerate anti-semitism or any other form of hate speech,” the German conglomerate stated on Tuesday.
Comments by Kanye West Deemed as Hateful
“Ye’s recent comments and actions were unacceptable, hateful, and dangerous, and they violated the company’s values of diversity and inclusion, mutual respect, and fairness,” the statement said.
According to Forbes magazine, the end of the deal reduced Ye’s net worth to RM1888.60 million. His stake in the Adidas partnership was valued at RM7.08 billion by the magazine.
According to Forbes, the rest of Ye’s fortune is made up of real estate, cash, his music catalogue, and a 5% stake in ex-wife Kim Kardashian’s shapewear company, Skims.
Representatives for Ye, formerly known as Kanye West, did not immediately respond to a request for comment.
For Adidas, ending the partnership and the production of Yeezy branded products, as well as stopping all payments to Ye and his companies, will have a “short-term negative impact” of up to 250 million euros (RM1175.18 million) on net income this year, the company said.
Ye has courted controversy in recent months by publicly ending major corporate tie-ups and making outbursts on social media against other celebrities. His Twitter and Instagram accounts were restricted, with the social media platforms removing some of his online posts that users condemned as antisemitic.
In now-deleted Instagram posts earlier this year, the multiple Grammy award-winning artist accused Adidas and U.S. apparel retailer Gap Inc (GPS.N) of failing to build contractually promised permanent stores for products from his Yeezy fashion line.
He also accused Adidas of stealing his designs for its own products.
On Tuesday, Gap, which had ended its partnership with Ye in September, said it was taking immediate steps to remove Yeezy Gap products from its stores and that it had shut down YeezyGap.com.
“Antisemitism, racism and hate in any form are inexcusable and not tolerated in accordance with our values,” Gap said in a statement.
European fashion house Balenciaga has also cut ties with Ye, according to media reports.
Controversial
“The saga of Ye … underlines the importance of vetting celebrities thoroughly and avoiding those who are overly controversial or unstable,” said Neil Saunders, managing director of GlobalData.
Adidas poached Ye from rival Nike Inc (NKE.N) in 2013 and agreed to a new long-term partnership in 2016 in what the company then called “the most significant partnership created between a non-athlete and a sports brand.”
The tie-up helped the German brand close the gap with Nike in the U.S. market.
Yeezy sneakers, which cost between RM944.30 and RM3305.05, generate about 1.5 billion euros (RM6.94 billion) in annual sales for Adidas, making up a little over 7% of its total revenue, according to estimates from Telsey Advisory Group.
Shares in Adidas, which cut its full-year forecast last week, closed down 3.2%. The group said it would provide more information as part of its upcoming Q3 earnings announcement on Nov. 9. – Reuters
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