By Gary Symons
TLL Editor in Chief
Sportswear titan Adidas has ended its partnership with Kanye West, saying it “does not tolerate antisemitism.”
The move comes after the controversial rapper and entrepreneur was suspended from Instagram and Twitter over offensive posts.
The move will be expensive for Adidas, which signed a mutually lucrative deal with West, who also goes by the name Ye. Adidas says it will take a “short-term” revenue hit of roughly $250 million this year as it pulls Yeezy-branded items off the shelves immediately. Adidas will also end all its production of Yeezy products, and terminate all payments to West and his companies.
Adidas says the price is worth playing, saying West’s recent comments are “unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.”
But the impact on both Adidas and Yeezy will be large and long felt. The partnership brought in more than $1.6 billion to Adidas in 2020, and its loss comes at a time when the company is also suffering lower profit margins due to decreased demand in the current economic slowdown.
The termination is likely more dire for West, however, who has recently broken with a variety of brands and long-time allies.
Adidas’s move comes after Balenciaga, and the rapper’s banker JPMorgan Chase cut ties with West after repeated antisemitic remarks. Ye’s talent agency CAA stopped representing him in the past month, and he also split with clothing giant Gap Inc. in a highly publicized spat.
West abruptly ended his relationship with Gap Inc., accusing the company of failing to meet its obligations.
West’s lawyers sent a letter to Gap notifying it of a termination of the partnership. West alleges Gap breached its agreement by not selling the Yeezy Gap-branded products at its brick-and-mortar outlets and failing to open dedicated stores for the brand.
West now intends to open his own chain of stores and to go into competition with Gap.
“Gap left (Kanye West) no choice but to terminate their agreement,” said lawyer Nicholas Gravante Jr. “Ye will now promptly move forward to make up for lost time by opening Yeezy retail stores.”
Shortly afterward, the CEO at Gap Inc. informed staff the company had cut its ties with West and his affiliated companies.
The series of blowups between West and major brands, agencies and investment banks may cause them some pain, but it appears most of the hurt will be inflicted on West himself, who amassed a $2 billion fortune from his music and his various brand partnerships.
Forbes is now reporting West’s worth has plummeted to roughly $400 million, an 80% drop, although West himself disputes those figures.
West’s personal fortune is also likely to take a hit, with Forbes reporting the artist is now worth $400m, down from $2bn in the magazine’s billionaires list this year. West has claimed the Adidas deal was worth more than $4bn and Forbes’ calculations were wrong.
The split was not terribly surprising for analysts in the fashion industry. Adidas earlier put up the deal for review after West’s controversial October Paris show in which models strode the catwalk wearing shirts emblazoned with the words “White Lives Matter,” an echo of the sentiment expressed by white supremacists in the US.
But it was the antisemitic comments in early October that pushed many brands and partners over the line. Twitter locked down West’s account on Oct. and removed offensive tweets in which West said he was going “death con 3 on JEWISH PEOPLE.” Similarly, Instagram suspended West’s account after he suggested the rapper Diddy was controlled by Jewish people.
While companies are rapidly cutting ties with West, there is some indication that West doesn’t care, and has been planning to smash those relationships in order to go out on his own.
As TLL earlier reported, the rapper’s company Mascotte Holdings has filed trademarks for a variety of apparel items, including jackets, hats, shirts, shoes and a host of accessories including blankets, wallets and umbrellas.
West also filed a trademark for Dove Sports, a completely new brand that, according to the filings, will be used for athletic services, such as training sessions, tournaments, fitness camps, and related educational programs.
Seen by themselves the trademarks would not necessarily mean much, but in addition to his separation from Gap only two years into a 10-year contract, and his breakup with Adidas, West has also said very clearly he plans to go it alone in his future fashion business ventures. For example, West told Bloomberg this week that he plans to terminate relationships with his licensing and corporate partners, and to instead launch his own online and brick-and-mortar outlets.
In the case of Donda, that would entail the opening of campuses that would include not just a retail store, but might also include an educational facility, fitness centre, and even farms or dorms, depending on the focus of that outlet. Merchandise would be sold at the campuses, but as part of a wider venture focused on both services and physical goods.
“Now it’s time for Ye to make the new industry,” said West. “No more companies standing in between me and the audience.”