Adidas cut ties with Ye, formerly known as Kanye West, on Tuesday after the musician said a number of hurtful and anti-Semitic things.
“Foot Locker, Inc. will not stand for any kind of antisemitism or behavior that is hateful or unfair. “We will not be supporting any future Yeezy product drops,” a Foot Locker spokesperson said. “We are still a partner with Adidas and carry a lot of their collections.”
Gap also shut down YeezyGap.com, which now sends people to the Gap website.
Gap said in September that it would end its partnership with Ye because “antisemitism, racism, and hate in any form are unacceptable and not in line with our values.” At the time, the clothing store said it would sell all of its remaining Yeezy items.
Gap and Foot Locker both said things that were similar to what Adidas said first. “Adidas does not stand for antisemitism or any other kind of hate speech. Ye’s recent comments and actions are unacceptable, hateful, and dangerous. They also go against the company’s values of diversity and inclusion, mutual respect, and fairness, the company said.
“After a careful review, the company has decided to end its partnership with Ye right away, stop making products with the Yeezy brand, and stop paying Ye and his companies. Adidas will stop doing business with Adidas Yeezy right away.”
Ye lost his status as a billionaire because of what Adidas did. Forbes says that without the Adidas deal, his net worth has dropped to $400 million, which comes from his music catalog, real estate, and his 5% stake in ex-Kim Kardashian’s shapewear company, Skims. Forbes thought that his deal with Adidas added $1.5 billion to his wealth.
The public and the company’s own employees wanted the German sportswear giant to cut ties with Ye. On October 16, Ye said on a podcast, “I can say anti-Semitic things, and Adidas can’t drop me. “What now?”
At least three legal groups and anti-racism groups had also asked Adidas to do something. By Tuesday morning, 169,100 people had signed a Change.org petition started by the Campaign Against Antisemitism. The petition asked Adidas to cut ties with Ye.
On Tuesday, the Anti-Defamation League, Stop Antisemitism, and the International Legal Forum all liked what Adidas did.
The ADL’s statement said, “In the end, Adidas’ action sends a strong message that antisemitism and bigotry have NO place in society.” Ye’s talent agency, CAA, said Monday that it had dropped him as a client. Balenciaga fired him last week.
Because he said bad things about Jews, Twitter and Instagram blocked him. Parler, a social media site for conservatives, then said that Ye had agreed to buy it. CNBC has tried to get in touch with Ye’s people but hasn’t heard back yet.
Impact on Adidas
Adidas said that this would hurt its net income in 2022 by up to 250 million euros ($246 million) in the short term because the fourth quarter is a very seasonal time.
It also said that it was the “sole owner of all design rights to existing products as well as old and new colorways under the partnership” and that it would give more details when it reported earnings for the third quarter on November 9.
Bloomberg said early in the day that it was going to end the partnership, which caused Adidas to drop by 4% in Frankfurt, Germany.
The company started looking into the partnership on Oct. 6, but since then it has been criticized for not doing anything.
In a LinkedIn post on Monday, Adidas employee Sarah Camhi from the U.S. said, “It’s been 14 days since Kanye started spewing anti-Semitic rhetoric, and Adidas has been quiet, both internally to our employees and externally to our customers.”
The head of trade marketing also said, “As a brand, we need to do better. We need to do better for our employees and for the communities we live in. I won’t stand with Adidas until it takes a stand.”
In 2013, the German company started working with Ye, and in 2016, they made a deal to make and sell items from his Yeezy clothing line. Adidas has said in the past that the partnership has had a “tremendous effect” on its business and is one of the most successful partnerships in its industry’s history.
But in recent months, Ye has spoken out against Adidas and some of his other business partners, like the store Gap.
He told CNBC that Adidas was “copying” his ideas, and he also slammed the company on social media, going after CEO Kasper Rorsted and board members in particular.
David Swartz, an analyst at Morningstar, says that the Yeezy brand brings in nearly $2 billion a year for Adidas, which is 10% of its total income.
“It has been an important product line for Adidas and has helped bring its North American business back to life. It has given Adidas a place in the collectors’ market and probably lets it reach a group it hasn’t been able to before, Swartz told CNBC in the past.
“Adidas has a hard time competing with Nike for top sponsorships, so Yeezy was a big help,” he said.
Analysts at Credit Suisse wrote a note on Tuesday about the company’s risks, including a recent profit warning that was worse than expected.
Related Stories Recommended By Writer:
