Adidas drops the other shoe on Ye

Discussion
Source: news.addidas.com/yeezy
Oct 26, 2022

Adidas yesterday ended its partnership with Ye, the artist formerly known as Kanye West, following a series of antisemitic remarks he has made recently in multiple forums.

“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,” a company said in announcing its decision. “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.”

Adidas expects to take a hit of around $250 million as a result of its action.

The athletic wear maker had come under recent pressure from a variety of anti-hate groups to cut ties with the controversial celebrity. Mr. West has made a series of antisemitic remarks in interviews and social media of late.

The Anti-Defamation League last week cited examples of Mr. West’s antisemitic tropes, including alleging that mainstream media is controlled by Jews to nefarious ends. He said in an interview on Revolt TV’s “Drink Champs” that the “Jewish people have owned the Black voice.”

Mr. West’s statements have been widely condemned except by a handful of religious and racial hate groups such as White Lives Matter and the Goyim Defense League. The latter hung a banner on a freeway overpass in Los Angeles this weekend that read, “Kanye is right about the Jews” as members gave a Nazi salute to motorists passing underneath.

The length of time it took Adidas to end its ties with Mr. West puzzled many, particularly after he called the company out on Drink Champs. “The thing about it being, Adidas, I can say antisemitic things and Adidas can’t drop me … now what … now what,” he said.

Gap, which last month announced it was ending its partnership with Mr. West, said yesterday that it is “taking immediate steps to remove Yeezy Gap product” from its stores and that it had taken YeezyGap.com offline.

Foot Locker is also removing Yeezy merchandise from its stores, CNBC reports. “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,” a Foot Locker spokesperson said.

Balenciaga terminated its relationship with Mr. West last week.

DISCUSSION QUESTIONS: Will the Adidas brand be negatively affected by what some saw as a a slow response to Ye’s antisemitic comments? Have Mr. West’s words doomed the Yeezy brand going forward?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"There is a big downside risk to tying your brand to iconoclastic personalities and this is an excellent example of how wrong it can go."
"Kanye’s actions and words have consequences, and it’s safe to say that the Yeezy brand may never recover."
"Adidas likely doesn’t have a viable plug-and-play replacement for Yeezy at the ready so no doubt there will be a corporate scramble to fill the void."

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27 Comments on "Adidas drops the other shoe on Ye"


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Mark Ryski
BrainTrust

There is a big downside risk to tying your brand to iconoclastic personalities and this is an excellent example of how wrong it can go. After Ye’s most recent rants, Adidas – along with most of Ye’s other sponsors – had no choice but to terminate the relationship. These contracted celebrities are an extension of the brand, and if they damage the brand through their words or actions, then brand owners have only one choice – terminate the relationship. Period. I believe the Yeezy brand is permanently damaged – and the damage is completely self-inflicted.

Neil Saunders
BrainTrust

Regardless of the financial impact, Adidas had to do what was right – and that was to drop someone who made antisemitic and hateful comments. Failure to do this would have severely damaged the brand. As Yeezy is so intimately connected with Kanye/Ye, it is very difficult to see how the brand moves forward other than as a standalone entity. Even then, far fewer people will now want to be associated with the label.

Liza Amlani
BrainTrust

Adidas will need to shift its growth plans into other products and partnerships. The brand will also need to reorganize the business in terms of design, development and merchandising as well as shift factory partners into non-Yeezy brands/categories. This will cost Adidas more than just the revenue that Yeezy brings in. The operating model will need to be reorganized. Yeezy generated an estimated $2 billion a year and about 10 percent of the Adidas revenue. According to BoF, Yeezy’s Adidas sneakers grew 31 percent over over year. The end of the Yeezy partnership will put a dent in revenues but I have no doubt that Adidas will recover. It will take time but this move was the right move.

Dion Kenney
BrainTrust
3 months 13 days ago

While they may have been slow to react, Adidas’s measured response – allowing Ye an opportunity to re-think and retract hateful public statements – will be seen as considered and not reactive.

Gene Detroyer
BrainTrust

Allow Ye an opportunity to retract his words? There is no retracting these words.

Ryan Mathews
BrainTrust

Gene, no argument the words are hateful and he shouldn’t be able to walk them back, but — in the world of celebrity — it happens all the time. People have gotten away with equally terrible things. Not that I think that’s right, but I do think it’s the way of the world.

Bob Amster
BrainTrust

You are damned if you do and damned if you don’t. Who is to decide what is soon enough, timely, or too late? The fact that the brand recognizes that there is a huge problem with this anti-Semite is sufficient comfort that they have done “the right thing” notwithstanding a significant impact to their business. (The right thing is seldom the easiest path.)

Zel Bianco
BrainTrust

Adidas should have been quicker out of the gate with a response to West’s horrible and shameful comments. Where are we in corporate America where we always let profits overshadow what is right and just? It’s a slippery slope and getting worse when we let comments like his go unchecked.

Michael La Kier
BrainTrust

Some saw their reaction as slow? All should view it as slow. Associating your brand with someone who brags about hate speech should not be allowed or emboldened.

You might think a company founded by an early member of the Nazi Party might be extra sensitive when someone so closely associated with their brand would start spouting antisemitic and other racist tropes.

Jeff Sward
BrainTrust

It’s one thing to come to a decision to sever ties under these circumstances, and another to get your arms around all the financial repercussions. I don’t blame Adidas for taking a couple of weeks to figure this out. There was a lot of work in the pipeline and calculating the markdown had to have been complicated. I think the important thing is that the right decision was reached and they had the ability to talk about the consequences. Now life goes on. And nothing yet, that I have read, about the financial consequences for Gap, which I am sure is also facing a substantial markdown for all the work that was in the pipeline.

Gary Sankary
BrainTrust

What exactly would they need a couple of weeks to understand? If they were able to sweep this under the rug, would people forget they were associated with an antisemitic bigot? Waiting suggests they endorse it, which I know is not the case, but given the company’s history the optics on this are terrible.

Jeff Sward
BrainTrust

I left an important word out of my initial posting. Human — as in human repercussions. Exiting a business of this size is going to leave a lot of people jobless and without a paycheck through no fault of their own. I don’t think that’s a small thing. I can only hope that’s how Adidas spent some of the time — planning and talking to people about what this all means. Not just doing the math. And putting the relationship “under review” is not waiting or endorsing. I can only imagine the response of shareholders and employees if Adidas had made a hasty announcement.

Brandon Rael
BrainTrust

Antisemitism, racism, and hate speech should never be tolerated. Empathy matters, and we have to do better as a society. Kanye West has been a polarizing figure for well over a decade, and his most recent comments are deplorable and unacceptable. The Yeezy brand equity has taken a significant hit, and it was encouraging to see Gap and other brands take a swift and definitive stance to end their partnership with Ye.

It was disappointing that Adidas did not take similar immediate actions; it’s encouraging to see that they have ended their partnership with the Yeezy brand. The short-term loss of $250 million that Adidas will have to absorb is a painful yet necessary strategy for the brand. Kanye’s actions and words have consequences, and it’s safe to say that the Yeezy brand may never recover.

Dick Seesel
BrainTrust

Kanye West practically dared Adidas to drop him, with some of his most recent comments, but the company had no choice regardless. It was indeed slow to react compared to Gap and other corporate tie-ins with the Yeezy brand. The big financial impact of the decision made it a slower process, but what choice did Adidas have when dealing with a toxic brand spokesman?

David Spear
BrainTrust

Adidas clearly made the right move by dropping the Yeezy brand. These types of collaborations with celebrities can be quite complex so the unwinding can take a little time. I don’t think the delay will hurt Adidas. If anything, consumers should react positively to their decision. Any anti-semitic, hateful speech is wrong regardless of the person delivering it.

Gene Detroyer
BrainTrust

Have Mr. West’s words doomed the Yeezy brand in the future? It will be alive and well with those who agree with his words.

As for the effect on Adidas? Yeezy represented less than 1 percent of Adidas’ revenues. While the slow response is not ideal, the issue will slowly disappear. Fortunately, the issue has not been magnified but, if they kept the relationship much longer and if Ye continued to talk, it would have had a huge deleterious result for Adidas.

My question — Why did it take so long for this German company to react?

Carol Spieckerman
BrainTrust

Adidas may have taken a bit too long to cut Kanye loose. Backlash against the brand had already hit a fevered pitch before the decision was made. Even so, memories are short, and most shoppers will likely be satisfied that Adidas cut ties at all. Adidas likely doesn’t have a viable plug-and-play replacement for Yeezy at the ready so no doubt there will be a corporate scramble to fill the void. It will be interesting to see if Adidas attempts to get back on the horse with another high-profile celebrity or if the inherent risk just isn’t worth it. Yeezy merchandise may enjoy a novelty surge in the resale market but it’s not a long-term strategy. The resale model doesn’t inoculate sellers from the pitfalls of association. Shoppers are much more focused and intentional with issues they care about these days.

Gary Sankary
BrainTrust

By waiting, they’ve opened themselves to a lot of criticism that could have been avoided if they’d done the right thing as soon as Ye made his hateful comments. You have to ask what they were waiting for. It’s not like Ye can take back the things he said and suddenly it’s all good again.

Ryan Mathews
BrainTrust
Yes, Adidas took too long to dump Ye and, as a result, missed a potential marketing opportunity that could have a least partially offset the losses they now face. The right time to sever the relationship with Ye was when he made his first public antisemitic remark. Zero tolerance. Full stop. What they should have done was say that, while the company has no tolerance for any kind of hate speech, they also realized that Ye seemed to be suffering from some form of mental illness and that they were going to take the “Ye Money” away from him and donate it to a credible mental health institution, ideally one focused on emergent majority communities. As to the brand, Yeezy isn’t automatically doomed forever. Americans love a comeback story so if Ye – or whatever he calls himself next – got some help, realized the error of his ways, made a public apology to the Jewish community, and did something concrete to improve relationships between the Black and Jewish communities, the brand might come back… Read more »
Georganne Bender
BrainTrust

This goes back to the age old question: Why does it take a crisis to force change? Kanye West has been saying and doing hateful things for a very long time. Adidas didn’t move fast enough.

Kanye has a huge, loyal following on social media. We haven’t seen the last of the Yeezy brand yet.

Mark Self
BrainTrust

The only surprise here is that it took so long for this to happen. CAA dumped him too, but belatedly. I think Adidas will not be injured from a brand perspective — we live in a “what is new” news cycle and the slow response will be forgotten. They took action, slowly — but they took action.

Lisa Goller
BrainTrust

It’s a PR nightmare all around. In an era of speed, Adidas’ slow response was puzzling and unfortunate. The Yeezy brand has been tarnished by Mr. West as a hurtful, controversial spokesperson.

Paula Rosenblum
BrainTrust

Adidas was having a rough time before this happened, as I recall. The shoe business is crazy cyclical, with brands and even categories (hiking shoes ruled for a few years) and most brands that have been around for a while know that.

It’s hard for me to quantify the impact of letting/not letting Yeezy and Mr. West go. I’m not in the brand’s demographic, and it’s pretty obvious that Mr. West is not a well man, along with having zero discipline.

We see what happens when we tie ourselves to people who are mentally unstable, regardless of their style sense. The mistake was made. I think Adidas can work its way out. It’s gonna cost them, because they’re going to have to find a new face that appeals to that demo, but they can do it. There are lots of sports. Lots of interesting people making music. To paraphrase his ex-wife. Adidas, “just has to… work at it.”

Phil Rubin
BrainTrust

Adidas will be fine albeit $2 billion lighter in revenue, at a minimum, going forward. It’s easy to say they took too long but given the size of the Yeezy business at Adidas, there is a lot more to do than say “we are dropping Kanye.” This comes at a time where there is CEO transition and other headwinds for the business. The challenges include goods in the pipeline, at retail and other factors (e.g., wholesale partners, production) and orchestrating not just the messaging – which indeed could have been much better handled and obviously more timely – and dealing with all the consequences.

Most importantly, the villain here is not Adidas or the other companies that did business with him, it’s Mr. West himself, and the related scum that he’s empowered, like those in LA and elsewhere that feel screened to show their true disgusting selves.

Mohamed Amer, PhD
BrainTrust

This was a critical yet belated decision by Adidas. Brands and their ambassadors become entangled in a delicate and, by design, very public dance. While not choreographed, it still requires agreed interpretation and harmonious movements. The Adidas-Kanye combination has been out of step for a while. One was trying to do a modern minuet, and the other was insistent on a slam dance. They operated on two different realities and agendas. I expect Adidas and other brands will take a more rigorous approach in selecting their future dance partners. The company faces a lot of uncertainty as it works to put this period behind it and searches for a new CEO after Kasper Rorsted’s surprise announcement last August.

Craig Sundstrom
Guest

While we were discussing the GAP partnership — another one that went south recently — I stand by the words I wrote 2 years and 3 months ago:

“Here on RetailWire, one of the perennial topics is the perils of celebrity endorsements. ‘Sometimes controversial’ is not a good choice for a company that has a broad, middle-class audience … I’m not going to withhold (my usual) wishing them well, but I have a distinct feeling this not going to end that way.”

Mr. West was the perfect example of “high risk.” This outcome should surprise absolutely no one.

Anil Patel
BrainTrust

Kanye West has put a lot at stake by making such ignorant comments. A mistake like this can lead to irrecoverable damage to the business. I believe racist remarks are intolerable, no matter where they are targeted. Also, customers only prefer to shop from brands that follow ethical standards. Therefore, partner brands have made the right decision to altogether cease their deals with Yeezy.

wpDiscuz
Braintrust
"There is a big downside risk to tying your brand to iconoclastic personalities and this is an excellent example of how wrong it can go."
"Kanye’s actions and words have consequences, and it’s safe to say that the Yeezy brand may never recover."
"Adidas likely doesn’t have a viable plug-and-play replacement for Yeezy at the ready so no doubt there will be a corporate scramble to fill the void."

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