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Adidas Ends Partnership with Kanye West

Adidas Ends Partnership with Kanye West

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Adidas AG is terminating its partnership with Ye after a string of offensive behavior by the rapper and designer turned a once-thriving shoe brand into a lightning rod for criticism.

The German sports company confirmed an earlier Bloomberg News report that it is cutting ties with Ye, formerly Kanye West, with immediate effect. In the current fiscal year, the company’s net income could be reduced by up to €250 million ($246.5 million).

“Kanye’s recent comments and actions have been unacceptable, hateful, and dangerous,” the company said in a statement.

Adidas has announced that it will end its partnership with Ye, cease production of Yeezy branded products, and cease all payments to Kanye and his companies.

Adidas, like Gap Inc. and Kering SA’s Balenciaga fashion label, has cut ties with Ye. In recent weeks, the rapper has made controversial statements, including anti-Semitic social media posts, and has moved to cut ties with his corporate partners. Kanye could not be reached for comment right away.

Adidas shares, already under pressure from the scandal, fell as much as 4.5% in Frankfurt trading, reaching their lowest level since 2016.

The Adidas decision comes after weeks of deliberation within the company, which has built the Yeezy line – along with Ye – into a brand that accounts for as much as 8% of Adidas’ total sales, according to several Wall Street analysts.

Under the partnership, the German company claims to be the “sole owner of all design rights to existing products, as well as previous and new colorways.” More information will be provided as part of the company’s third-quarter earnings report on November 9.

Adidas called the collaboration “one of the most successful collaborations in our industry’s history” earlier this month, and said it would continue co-managing Yeezy products during its review.

In September, the rapper stated that he wanted to negotiate with Adidas for a 20% royalty on all shoes he designed for the company in perpetuity.

Ye sparked even more controversy by wearing a “White Lives Matter” shirt to Paris Fashion Week. He was later barred from using his Twitter and Instagram accounts for making antisemitic remarks, which sparked a growing backlash from consumers and celebrities, with some calling for people to boycott Adidas products until the partnership is canceled.

The Ye scandal is just one of many problems for Adidas, which is looking for a new CEO to take over in 2023. Several times this year, the company has reduced its earnings forecast due to falling demand for its shoes and apparel in China and growing signs of economic trouble in Europe and North America.

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