Adidas To Continue Selling Yeezy Designs Without Kanye West
Adidas’ partnership with Kanye West started off strong accounting for about half of Adidas’s total profits, but recently ended with the company significantly lowering forecasted sales.
As a result of West’s antisemitic comments and troubling behavior, the partnership has been terminated by the brand – following much public criticism and demands for the brand to respond.
The company put out a statement saying, "adidas does not tolerate antisemitism and any other sort of hate speech. 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. After a thorough review, the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products and stop all payments to Ye and his companies. adidas will stop the adidas Yeezy business with immediate effect.”
They approximated a short-term loss of $247 million on the company’s net income in 2022 given the high seasonality of the fourth quarter.
On an earnings call earlier this month, Adidas said it plans to release more Yeezys under its own branding. As would be expected, West had previously objected to Adidas releasing shoes without his approval. Adidas Chief Financial Officer Harm Ohlmeyer stated that Adidas has sole ownership of all design rights to existing products as well as previous and new color-ways under the partnership. He also said that the brand intends to make use of these rights as early as 2023. Their recent earnings report was in line with the company’s forecasted loss. However, in 2023 the company will save approximately $302 million in royalties and marketing costs that it will no longer be paying to support the Yeezy business.
“Let me be clear, we own all the IP, we own all the designs, we own all the versions and new colorways,” Ohlmeyer said.
Adidas isn’t the only brand cutting ties with West, recently Balenciaga and Vogue did the same, Creative Artists Agency (CAA) is no longer working with him as a client, and a recently completed documentary about West was shelved by film and television studio MRC.
“This morning, after discussion with our filmmakers and distribution partners, we made the decision not to proceed with any distribution for our recently completed documentary about Kanye West. We cannot support any content that amplifies his platform,” CEOs Modi Wiczyk and Asif Satchu, as well as COO Scott Tenley of MRC, wrote in a letter.”
Retailer Gap also announced it was removing Yeezy Gap merchandise from its stores and has shut down the site YeezyGap.com. Footlocker also pulled all the Yeezy merchandise they were selling.
Gap released a statement saying, “Antisemitism, racism and hate in any form are inexcusable and not tolerated in accordance with our values. On behalf of our customers, employees and shareholders, we are partnering with organizations that combat hate and discrimination.”
Just last year, in 2021, Gap Inc. had signed a 10-year deal for Yeezy Gap and the option to renew after 5 years – the deal barely lasted over a year.
Footlocker had a similar sentiment, stating, “Foot Locker, Inc. does not tolerate any form of antisemitism, or hateful and discriminatory behavior. While we remain a partner with adidas and carry a wide assortment of their collections — we will not be supporting any future Yeezy product drops, and we have instructed our retail operators to pull any existing product from our shelves and digital sites.”
