adidas has officially severed ties with billionaire Kanye West.
The reasoning for dropping West: According to a press release, adidas reached the decision to cut ties due to West’s antisemitic remarks that do not reflect the company’s values rooted in diversity and inclusion.
“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,” the company said in a statement.
Termination Will Go Into Effect Immediately
West’s termination will go into effect immediately, and the company plans to halt all production of Yeezy-branded products and payments to Ye and his companies.
“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,” the statement read.
The numbers: Although the company has not released the revenue generated from their partnership with West, Morningstar analyst David Swartz estimated that Yeezy brings in nearly $2 billion per year, about 10 percent of adidas’ total sales, according to The Washington Post.
Now, adidas could expect to take a loss of about $247 million in 2022.
“This is expected to have a short-term negative impact of up to €250 million on the company’s net income in 2022 given the high seasonality of the fourth quarter,” the company said in a press release.
The company said the termination would have a short-term negative impact of up to $246.5 million on its full-year net income, given the high percentage of sales in the final quarter.
But the long-term damage will be much bigger https://t.co/4wZvtrmfS6 pic.twitter.com/vKLflG3g4f
— Bloomberg Opinion (@opinion) October 25, 2022
adidas now joins a list of growing companies cutting ties with West: Gap and West’s partnership came to a close following his remarks to part ways with the major retailer as he was looking to take full control of the Yeezy brand to bring it directly to consumers.
“It’s time for me to go it alone,” West told Bloomberg. “It’s fine. I made the companies money. The companies made me money. We created ideas that will change apparel forever. Like the round jacket, the foam runner, the slides that have changed the shoe industry. Now it’s time for Ye to make the new industry. No more companies standing in between me and the audience.”
As AfroTech previously reported, Balenciaga cut ties with the Ye, declaring they no longer had any “relationship nor any plans for future projects related to this artist.”