American rapper and fashion designer Kanye West (now known by his stage name Ye) may have come to realize what it means to be "mischief out of his mouth."
Earlier, Kanye West's inappropriate remarks in public caused public controversy, and Gap and Balenciaga announced their cancellation of cooperation.
Now with the intensified public opinion, the German sports giant Adidas also announced on the 25th to immediately terminate all cooperative relations with Kanye West.
"Ye's recent remarks and actions are unacceptable, hateful and dangerous," Adidas said in a statement. "Adidas will stop producing Yeezy-branded products and stop all payments to Ye and his company."
In addition, Adidas stated that the termination of the Yeezy business will bring about a loss of $250 million in revenue in the fourth quarter of fiscal 2022. Adidas reiterated that the company is the sole owner of all existing Yeezy designs during the cooperation period. More details will be in It was disclosed at the time of its third-quarter earnings release on November 9.
The Yeezy series is Kanye West's most proud work. Its earliest joint name is the Air Yeezy series of sneakers jointly launched by the American sports brand giant Nike.
In 2013, the Yeezy series of sneakers switched to Adidas.
According to the original agreement, the contract between the two parties will not expire until 2026.
Adidas has called the partnership one of the most successful ever in the industry.
As one of the most popular shoes in the fashion shoe market in recent years, Yeezy shoes occupy a pivotal position in Adidas' annual report.
As early as 2019, the annual sales of this series of shoes have exceeded 1 billion US dollars, and it has continued to increase since then.
According to the financial report data, the Yeezy series is Adidas' current "sales king", accounting for up to 8% of Adidas' sales. In 2021, the sales of Adidas Yeezy series sports shoes will reach nearly 1.7 billion US dollars, a year-on-year increase of 31%.
However, with the popularity of the Yeezy series of sports shoes, there have also been many contradictions in the distribution of interests between the two parties.
In 2020, Kanye West asked to enter the Adidas board of directors, otherwise the cooperation will be terminated, but Adidas officials did not respond to this request.
In September of this year, he said on his personal social media platform that Adidas wanted to buy Yeezy for $1 billion, but he was not willing.
"I really want to create something that will change the world and leave it to my kids. They (Adidas) want to buy all my shares for $1 billion, but I'll have $500 million in royalties next year."
Earlier this month, Adidas said it was evaluating the partnership with Kanye West, "After several attempts to address the current issues, we have decided to evaluate the partnership. During the evaluation period we will continue to Co-manage the current partnership business. The partnership with Ye is one of the most successful in the group’s history. But we also understand that all successful partnerships are based on mutual respect and shared values.”
However, even if Adidas cancels the cooperation between the two parties, it does not mean that the company will "lose" Yeezy.
Adidas management has said it will sell the range under the company's own brand early next year, according to analysts at Morgan Stanley and RBC Capital Markets.
"Going forward, it is our understanding that the company will no longer sell any Yeezy-branded products, and all Yeezy product lines will be under the Adidas brand," Morgan Stanley analyst Edouard Aubin said in a note to clients on Tuesday. "
RBC analyst Piral Dadhania said in a statement: "Adidas owns the relevant rights to existing Yeezy product designs and will be able to sell these products under the Adidas brand (rather than the Yeezy brand) following the termination of the Yeezy series partnership, which Adidas intends to sell in the Execution begins in the first quarter of next year. Speaking of the company itself, Adidas believes it can limit revenue losses through this strategy, and given that there will be no royalties (related to the unwinding of the partnership) and related marketing expenses paid in 2023, the company can also Save money."
But Dadhania also said: “Following the latest batch of bad news from Adidas, we expect the company’s revenue, margins, and earnings to decline further. We are skeptical that Adidas will be able to fully cover Yeezy’s lost profits in 2023, and Think this could weigh on sentiment further."
Shares in Adidas fell 3.2% at the close in Germany following the news.