Backlash for Adidas amid Kanye West Yeezy fallout

Adidas AG put its relationship with Kanye West under review amid growing acrimony between the designer and his closest corporate partner, sending shares of the German sports company lower.

On Thursday night Adidas said it was reviewing the troubled Yeezy partnership after trying repeatedly to resolve the situation privately. The stock fell as much as 3.2% in early Frankfurt trading on Friday, approaching a six-year low.

West, who now goes by Ye, responded on Instagram by swearing at Adidas. He has had longstanding disagreements with the company about how the line has been managed. Later he deleted the post.

West has also recently taken on Adidas CEO Kasper Rorsted, who plans to step down in 2023. Days after that news broke in August, West posted a fake news article on his Instagram feed insulting Rorsted, then quickly deleted it.

Adidas said Yeezy, which expires in 2026, has been among the most successful footwear collaborations ever. The line accounts for as much as 8% of Adidas’ sales, Cowen analyst John Kernan said in a September 16 note.

The Yeezy line is thought to have “disproportionately contributed” to Adidas brand sales growth in recent years, UBS analysts led by Zuzanna Pusz said in a note on Friday. The drama compounds other problems facing the company, including the CEO search, increased competition and falling sales in China, Pusz noted.

The partnership, forged roughly a decade ago, was a key motor behind Adidas’ soaring sales leading up to the pandemic.

The relationship has frayed in the past few years, notably after longtime Adidas executive Eric Liedtke, who shepherded the collaboration, left the company in 2020. Since then, West has increasingly criticised Adidas’ management of the Yeezy line, and called for a seat on the German company’s non-executive supervisory board. West has never been offered a seat.

West caused more controversy this week after wearing a shirt at the Paris fashion week with the words “White Lives Matter”.

Last month Ye and his other prominent corporate partner Gap Inc split after similar turmoil between the two parties. That apparel deal was supposed to run through to 2030.

In a September interview with Bloomberg, Ye disavowed his corporate deals and said it was time to do business on his own, sharing plans to open his own stores.

“It’s time for me to go it alone. No more companies standing in between me and the audience.”

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