Adidas dropped Kanye, but it will end up hurting them as much as it hurts Ye.
It is crazy that they fully own all his concepts and merchandise.
“Adidas does not tolerate antisemitism and any other sort of hate speech,” Adidas said in a statement. “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.”
The parting of ways comes amid increased pressure on social media and among investors for Adidas to move beyond West and its Yeezy line. Adidas stock, down 64% so far in 2022, continued to fall as West’s bizarre rants intensified.
In ending their relationship, Adidas will have a huge hole to fill financially: The popular Yeezy line represents about $1-$2 billion in annual sales for the company, according to Evercore ISI analyst Omar Saad.
“We see big risk around the Yeezy franchise,” Saad said in a recent note to clients.
Besides the West drama, Adidas is entering wounded into the holiday season — the latest retailer to get flat-foot operationally as global economies have slowed. That poor execution has primarily led to a glut of Adidas inventory that will have to be aggressively marked down at the expense of profits, the company warned a week ago.
Adidas said third quarter sales rose a lackluster 4% in the third quarter excluding the impact of volatile currencies. Sales in China tanked by a double-digit percentage.
Yeezy being a Billionaire is no longer the case but don’t worry, he isn’t starving.
Adidas’ decision also cost Ye his billionaire status. Forbes estimates that without the Adidas deal, his net worth has dropped to $400 million, which comes from his music catalog, real estate and his 5% stake in ex-Kim Kardashian’s shapewear company, Skims. Forbes valued his Adidas deal as adding $1.5 billion to his net worth.
The lesson here is that in our society, especially if you are black, it is ok to talk bad about your people, but when you speak crazy about other races or religions, you actually can get canceled.
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