Adidas AG ADDYY -5.34%decrease; red down pointing triangle said it would end its partnership with Kanye West after a string of controversies including a recent anti-Semitic outburst from the musician and fashion-brand owner.
The move, which ends a lucrative arrangement that has produced the popular Yeezy collection of sneakers, comes after weeks of pressure on the German sportswear company from human-rights advocates and after other businesses severed their ties with Mr. West, who goes by Ye. Retail chain Gap Inc., GPS 0.85%increase; green up pointing triangle film-and-television studio MRC and French fashion house Balenciaga are among companies that have distanced themselves from Mr. West in recent weeks.
Earlier this month, Adidas put its partnership with Mr. West under review. Days later, Twitter Inc. TWTR 1.55%increase; green up pointing triangle and Meta Platforms Inc.’s META 3.70%increase; green up pointing triangle Instagram locked his accounts after he made anti-Semitic posts.
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Adidas said Tuesday that Mr. West’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.”
Mr. West couldn’t be immediately reached for comment.
The breakup adds another major headwind for Adidas, which has been struggling to grow in China, the largest apparel and footwear market in the world. Adidas is also in the midst of searching for a new chief executive after the company unexpectedly said in August that its current leader, Kasper Rorsted, will step down next year.
“The termination of the partnership with Kanye West is understandable and necessary. Financially, the termination is a heavy blow,” said Ingo Speich, head of sustainability and corporate governance at German fund manager Deka Investment, which holds 0.7% of Adidas. “It remains to be hoped that no further partnerships will be lost.”
Adidas said that it would terminate the partnership immediately, end production of Yeezy branded products and stop all payments to Mr. West and his companies. The decision is expected to have a short-term hit of up to €250 million, equivalent to $247 million, on the company’s net income in 2022, the company said.
Adidas shares were down 3.8% in Frankfurt after the announcement. They are down 60% this year.
Human-rights campaigners in recent days have publicly criticized Adidas over its partnership with Mr. West. On Tuesday, the Central Council of Jews in Germany called on the company to end its partnership with the artist.
Story Source: https://www.wsj.com/articles/adidas-terminates-partnership-with-kanye-west-over-rappers-anti-semitic-remarks-11666694801?fbclid=IwAR1Zxga57E22Xlmw2jLVMGZBI0qFmzGLQAYaEM_m938Ef9TtXvEcS71qGEo