While Balenciaga and JPMorgan Chase both cut ties with Kanye West after repeated anti-Semitic remarks, West’s biggest corporate benefactor, Adidasremains noticeably silent.
But the German sportswear giant may not be able to ignore the controversy any longer after Kanye West taunted the company saying he could be as anti-Semitic as he wanted and still had the support from the retailer.
“I can say anti-Semitic things, and Adidas can’t let me go. Now what? Now what?” Kanye is seen asking in a short music video from the October 16 episode of Drinking Champions, a hip-hop community podcast hosted by NORE and DJ EFN, which has since been taken down.
The video has sparked fresh calls for the German sportswear giant to drop Kanye West, and the hashtag #BoycottAdidas is trending. Twitter since the clip was released on October 21.
Kanye West was recently blocked on Instagram and Twitterafter saying he would be attending “Death Con 3 on JEWISH PEOPLE”, and he has since gone on an anti-Semitic attack on “Jewish media” and “Jewish Zionists”, for allegedly taking advantage of black people in the music industry. music.
Adidas has already put its Yeezy offer in review after West’s controversial YZY show on October 3 at Paris Fashion Week, where models walked the runway wearing “White Lives Matter” shirts. Adidas said Oct. 7 that it would review its troubled partnership, noting “we will continue to co-manage the current product during this time,” Adidas said in a statement.
But as Adidas ponders whether to drop Kanye West and highly profitable brand Yeezy from its product offering, the company has released the Adidas Yeezy Boost 350 v2 in a brand new colourway, Salt, on Sunday, which has already been bought and sold 899 times on the StockX online reseller market.
Adidas’ troubled future
The growing advertising crisis comes at a bad time for Adidas.
In his last report on third quarter results, published last Thursday, Adidas lowered its operating margin forecast for this year from 7% to 4% due to excess inventory that will have to be sold at a discount. Adidas warned unsold were piling up in warehouses due to deteriorating store traffic patterns in Greater China and a slowdown in demand in Western markets since September.
The news sent Adidas shares down as much as 9.1%, wiping out all the gains made during CEO Kasper Rørsted’s six-year tenure and leaving it with a market value around one-sixth that of its US rival. . Nike. Faced with declining revenue, Adidas may be inclined to keep Kanye West on its payroll as the Yeezy line accounts for an inordinate percentage of Adidas’ sales.
Although Adidas does not report specific sales figures from the Yeezy deal, which began in 2013 and expires in 2026, Morningstar analyst David Swartz estimates Yeezy sales for Adidas to be around 2 billion. dollars per year, potentially representing 10% of total Adidas sales.
“Ten years ago, Adidas was struggling in the United States, the biggest sportswear market. Thanks, in part, to Yeezy, his US business rebounded,” Swartz said. “It’s helped bring relevance back to its business in North America, and it’s made Adidas relevant in the collector market and probably allows it to hit a demo it missed.”
Kanye West remained vague on the future of his partnership with Adidas, tell reporters outside her daughter North West’s basketball game on October 22 that “we’re going through legal process right now, so anything can happen.”
Adidas did not respond Fortune’s request for comment at the time of publication.
An anti-Semitic spokesperson
The Anti-Defamation League, a Jewish NGO, has launched a campaign called #RunAwayFromHate to allow people to contact Adidas directly and demand that the company condemn West’s comments.
The ADL wrote in an open letter to Adidas: “In light of Kanye West’s increasingly strident anti-Semitic remarks over the past few weeks, we were disturbed to learn that Adidas plans to continue releasing new products from his Yeezy brand without any apparent acknowledgment of the controversy surrounding his most recent remarks.
They note that while Adidas condemned West’s anti-Semitism, hate groups like White Lives Matter and the Goyim Defense League celebrate and promote Ye’s comments.
“We urge Adidas to reconsider its support of the Ye product line and issue a statement that makes it clear that the company and the Adidas community have zero tolerance for anti-Semitism,” the ADL letter reads.
Kanye West also recently make an offer to buy the alt-tech social media platform Parler. “In a world where conservative views are seen as controversial, we need to make sure we have the right to express ourselves freely,” Ye said. said in a press release October 17.
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