Simmering row with Kanye West hits Adidas shares
● 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 on Thursday it was reviewing the troubled Yeezy partnership after trying repeatedly to resolve the situation privately. The stock fell 3.2% in early Frankfurt trading on Friday, approaching a six-year low.
The US rapper, songwriter, record producer, and fashion designer, who goes by the name Ye, responded on Instagram by cursing Adidas. He has had long-standing disagreements with the company about management of the partnership. Later he deleted the post.
West has recently taken on Adidas CEO Kasper Rorsted, who plans to step down next year. Days after that news broke in August, West posted a fake news article on his Instagram account insulting Rorsted, before deleting it.
Adidas said Yeezy, which expires in 2026, has been among the most successful footwear collaborations. The line accounts for as much as 8% of Adidas’s sales, John Kernan, an analyst at investment bank Cowen, said in a September 16 note.
The Yeezy line is said 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 Adidas, including the search for a new CEO, increased competition and falling sales in China, Pusz noted.
The partnership, forged roughly 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 couple of years, notably after longtime Adidas executive Eric Liedtke, who shepherded the collaboration, left 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. He hasn’t received an offer.
Further controversy followed this week after he wore a shirt at the Paris fashion week that read, “White Lives Matter”.
Last month, West and Gap, his other prominent corporate partner, split after similar turmoil. That apparel deal was supposed to run to the end of 2030.