Adidas 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.
Adidas said that 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 Friday, approaching a six-year low.
West, who now goes by Ye, responded on Instagram by cursing at Adidas. He has had long-standing 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 yet. The line accounts for as much as 8% of Adidas’s 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 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 about a decade ago, was a key motor behind Adidas’s soaring sales leading up to the pandemic. But the relationship has frayed in the past few years, notably after longtime Adidas executive Eric Liedtke — who shepherded the collaboration — departed the company in 2020. Since then, West has increasingly criticised Adidas’s management of the Yeezy line, and called for a seat on the German company’s non-executive supervisory board. West has never been offered such a seat.
West caused more controversy this week after wearing a shirt at the Paris fashion week that said “White Lives Matter”.
Last month, Ye and his other prominent corporate partner Gap split after similar turmoil between the two parties. That apparel deal was supposed to run to 2030.
In a September interview, 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,” Ye said. “No more companies standing in between me and the audience.”