Adidas finally gave Ye the boot over a series of antisemitic remarks made by the rapper formerly known as Kanye West. But the move has left many retail experts wondering why it took the German retail giant more than two weeks to speak out. “They should have done it quicker,” Simon Porter, head of retail at media agency Hatched, told Inside Retail. “It’s extraordinary they let it escalate so much. It’s one of those things where, as a brand, I don’t think you have a choice.
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Adidas released a statement on Tuesday, distancing itself from Ye’s comments and clarifying the termination of their partnership.
“Adidas does not tolerate antisemitism and any other sort of hate speech. Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness,” the company said, adding that it was stopping the Adidas Yeezy business with immediate effect.
Staying silent spoke volumes
The announcement came after several days of mounting pressure on the sportswear brand to cut ties with the controversial celebrity, with whom it has worked on Yeezy-branded shoes and apparel since 2013.
The retailer placed the partnership under review in early October, after Ye publicly criticised the company’s leadership team for allegedly copying his designs and not opening Yeezy stores. Ye had also drawn criticism for wearing a “White Lives Matter” T-shirt at Paris Fashion Week, which the Anti-Defamation League has identified as a neo-Nazi slogan.
But for more than two weeks, Adidas stayed silent about a series of antisemitic remarks that Ye posted on social media, which got him blocked from Instagram and Twitter and led talent agency, CAA, and luxury fashion brand Balenciaga, which partnered with him on the Yeezy Gap project, to cut ties with him.
“Staying silent was not the PR strategy to get Adidas out of this hole. But, it seems to be their default,” Porter said.
“They’ve cut him a lot of slack over the years with his public commentary such as disparaging the CEO. Arguably, if they’d clamped down sooner, this wouldn’t have escalated. By staying silent in the past Adidas gave implicit consent to his behaviour.”
Porter noted that the longer Adidas stayed silent, the greater the danger became that people would start to link the situation to the brand’s past association with the Nazi Party. Adidas founder Adi Dassler was a member.
“They really don’t want the two to become linked,” he said.
A hammer blow to its finances
So why did the retailer risk so much by waiting so long to speak out? One possible reason is the complex and lucrative nature of its partnership with Ye, which is estimated to bring in 10 per cent of Adidas’ overall revenue.
The company said the decision to terminate the partnership would have a negative short-term impact of up to 250 million euros ($388.9 million) on its net income in 2022, given the high seasonality of the fourth quarter.
“That will be a hammer blow to Adidas at a time when discretionary spend is coming under pressure. They’ve already suffered in the huge Chinese market with revenue dropping over five consecutive quarters due to the contracting Chinese economy,” Porter said.
“But the brand risked far more by not cutting ties in terms of reputational damage and subsequent revenue impact.”
Neil Saunders, managing director of GlobalData, agreed, saying the retailer had “no choice but to act” after Ye’s words started stirring up antisemitism among others, with one hate group hanging a banner over a freeway in Los Angeles, which read, “Kanye is right about the Jews.”
“Although Adidas was somewhat late in cutting ties with Kanye West, it has now yielded to the inevitable and ended its partnership with the artist,” Saunders said.
“Given the baseness of Ye’s recent comments, and the fact his words are now stirring up antisemitism among others, Adidas had no choice but to act in order to protect its reputation and show customers it is on the right side of morality.”
A wake-up call to other retailers
For Saunders, the situation should serve as a wake-up call for retailers and brands.
“The saga of Ye, not just with Adidas but with brands like Gap and Balenciaga, underlines the importance of vetting celebrities thoroughly and avoiding those who are overly controversial or unstable,” he said.
“Companies or brands that fail to heed this will get stung, especially if they become overly reliant on a difficult personality to drive their business.”
One lesson retailers can learn from the way Adidas mishandled the situation is to always be prepared.
“Have a crisis management plan ready for this type of eventuality. It felt like Adidas was hoping it would blow over, but every day it got worse,” Porter said.
“As a brand working with a controversial ambassador, you need to be prepared for this sort of situation.”
