Adidas AG plans to end its partnership with Kanye West following a rash of offensive behaviour from the rapper and designer that turned a once-thriving shoe brand into a lightning rod for criticism.
The German sports company may announce the move as early as Tuesday, according to people familiar with the matter, who asked not to be identified because discussions are private. A representative for Adidas didn’t immediately respond to requests for comment.
Adidas would join Gap Inc. and Kering SA’s Balenciaga fashion
label in cutting ties with West, who now goes by Ye. The rapper has made
controversial statements, including antisemitic social media posts in recent
weeks, and has moved to cut ties with his corporate partners. Ye couldn’t
immediately be reached for comment.
Adidas shares, already
weighed down by the controversy, fell as much as 3.2 percent in Frankfurt
trading, reaching the lowest since April 2016.
The Adidas decision follows weeks of deliberations inside the
company, which over the past decade has built the Yeezy line — together with
Ye — into a brand that’s accounted for as much as 8 percent of Adidas’s
total sales, according to several estimates from Wall Street analysts.
The
German company is of the view that it owns the intellectual property rights
to the products from the collaboration and could continue producing the
models, one of the people said.
Adidas earlier this month called
the partnership “one of the most successful collaborations in our industry’s
history” and said it will continue co-managing Yeezy products during its
review.
That success, however, has come with plenty of acrimony between
the partners. Ye has accused Adidas of copying his ideas and mismanaging the
brand, and taunted outgoing chief executive officer Kasper Rorsted on social
media. Meanwhile, Adidas has said it’s repeatedly tried and failed to
resolve issues with Ye privately.
The rapper said in September he
wants to negotiate with Adidas to get a 20 percent royalty on all the shoes
he’s designed with the company in perpetuity.
Ye caused more
controversy after that by wearing a shirt at the Paris fashion week that
said “White Lives Matter.” He later got locked out of his Twitter and
Instagram accounts after making repeated anti-Semitic remarks — remarks that
have created a growing backlash of consumers and celebrities, with some
calling for people to boycott Adidas products until the partnership is
canceled.
The Ye situation is one of many headaches for Adidas,
which is searching for a new CEO to take over in 2023. The company has
lowered its earnings forecast several times this year amid falling demand
for its shoes and apparel in China and growing signs of economic trouble in
Europe and North America.
