Adidas is ending its collaboration with Ye, the brand confirmed in a statement on Tuesday, 25th Oct’22. The decision to drop him comes after months of deliberation about Kanye West publicly challenging the brand and in light of him expressing “anti-Semitic views” both in his interviews as well as posts on social media platforms.
The list of companies that have recently cut ties with the 45-year old rapper, songwriter, record producer, and fashion designer is growing long with Adidas being the latest entrant. After letting the world know that they were reviewing their relationship with Ye, Adidas finally issued the following statement:
“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.”
However, this announcement came shortly after the following tweet from Sarah Camhi – Director, Trade Marketing at Adidas:
If anything, the above tweet clearly indicates that there was hesitation within the German brand’s ranks regarding Kanye West and frustrations were building up due to inaction by the higher-ups in the German HQ. After all, his Yeezy brand accounts for a big chunk of revenue for Adidas ($2 billion) each year which accounts for 10% of their total revenue! Adidas clearly acknowledged the financial impact in its statement:
“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.”
Hours later, Gap and then Foot Locker said they would immediately remove Yeezy products from their stores.
“Antisemitism, racism and hate in any form are inexcusable and not tolerated in accordance with our values.” – GAP
“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.” – Foot Locker Inc.
While GAP had announced back in September’22 that it would end its partnership with Ye, it was also mentioned at the time that it would sell through its remaining Yeezy inventory. However, this latest statement followed by GAP shutting down www.YeezyGap.com means that the clothing line’s sales would be coming to a complete halt. The Yeezy GAP website now redirects to the main Gap website.
Ye’s Adidas deal was supposed to run all the way till 2026 but it seems that Adidas has had enough. They have now joined notable names such as Balenciaga, CAA (hollywood talent agency), JP Morgan Chase & Co, and Anna Wintour, all of which have cut their ties with Ye. While Adidas says that it is immediately stopping the Yeezy business, it clearly intends to sell the existing Yeezy inventory solely under the three stripes’ brand. As per Morgan Stanley analyst Edouard Aubin:
“Looking ahead, on our understanding, the company will not sell any Yeezy-branded products and all Yeezy products will be branded under Adidas brand.”
The statement from Adidas also says that “Adidas is the sole owner of all design rights to existing products as well as previous and new colorways under the partnership.” This ownership battle over designs and colorways had been the main bone of contention between Ye and the brand when he started going at them publicly for “copying” his designs. Think of this as a brand collaborating with you, but your designs and colorways do so well that the brand decides to spawn a General Release(GR)/Inline release vertical based on the same! This silo was clearly generating a significant amount of revenue for Adidas without having to cut Ye in on the spoils. Conversely, as per Forbes’ latest revelation, Ye’s networth has nosedived to $400 million and he is no longer considered a multi-billionaire!
Just like any other disaster, this too was a chain of events that led to the current situation. After Ye rocked a “white lives matter” t-shirt in a now infamous picture with Candace Owens at his Paris fashion show which had already created quite an uproar on social media as well as the music industry that wholeheartedly backed the Black Lives Matter movement, his Drink Champs podcast episode sealed the deal for many. During his now removed episode on the Revolt Network podcast (owned by Sean Combs aka Puff Daddy aka Diddy) hosted by Victor James Santiago Jr. aka N.O.R.E aka Noreaga, Ye mentioned that George Floyd died because of a Fentanyl overdose and not police brutality. He also said things like “I can say anti-Semitic things and Adidas can’t drop me.” George Floyd’s family is already considering suing Ye over his remarks seeking $250 million in damages.
Meanwhile, Kanye was escorted out of Skechers HQ where he allegedly showed up “uninvited” in their own words. This denies him any opportunity to take his sneaker business elsewhere after Adidas having made up their mind. In the next piece of news, Donda Academy’s team then got banned from playing basketball at high school games. Yep, the people in power and their cabals are now targeting school kids who have absolutely nothing to do with Kanye’s remarks. This in a way proves that he wasn’t lying from the get go and they are only going out of their way to prove him right. The cancel culture has come in hard for him this time and Instagram, in a hilarious “fuck-it-let’s-see-what-happens” move have revoked their ban on Ye’s account. He has been posting since morning and the rap, fashion and sneaker world is tuning in.
It is highly unlikely that Adidas will be able to fill the void created by Ye’s departure. Since making their statement, Adidas’ shares have already plummeted by 3.2%. Kanye West is a household name just like Adidas, except that Ye has a huge hold on public sentiment unlike the former. There is no doubt that there would be a huge shift in consumer trends as far as Adidas is concerned and they will not be able to fully compensate for the losses in 2023. Moreover, it has always been argued that Ye never needed these corporations to begin with and the sneaker community has long believed that starting his own chain of stores is the way to go.
Ye’s first fashion label, Yeezy, has been the subject of a number of intellectual property disputes since its inception, despite it being massively successful. The most recent dispute involves a fragrance company called, Y.Z.Y, Inc (YZY). In June 2018, YZY filed a trade mark application with the US Patent and Trademark Office (USPTO) for a stylized version of YZY against fragrances and hair care products. The mark was rejected on the basis that it was too similar to a mark filed by Kanye West’s company, Mascotte Holdings, Inc, a year earlier. The mark in question was for the sign YZY as applied to footwear. The examiner argued that despite the fact the marks are to be used on different goods, the “literal elements of the marks are identical in appearance, sound and meaning”.
YZY has since taken its fight to the USPTO’s Trademark Trial and Appeal Board where it is currently attempting to cancel Ye’s earlier filed YZY registration on the basis that its use of the YZY mark predates that of Kanye’s use of the same. Meanwhile, Adidas has said that on November 9 they will provide more details regarding their deal with Ye as they announce their Q3 earnings.