Adidas AG terminated its partnership with rapper and fashion designer Kanye West (also known as Ye) on Tuesday (Oct 25) after he made a series of antisemitic remarks, a move that knocked the musician off the Forbes list of the world's billionaires.
Adidas put the tie-up, which has produced several hot-selling Yeezy branded sneakers, under review this month.
"Adidas does not tolerate antisemitism and any other sort of hate speech," the German company said on Tuesday (Oct 25).
"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," it said.
Forbes said the end of the deal meant Ye's net worth shrank to US$400mil (approximately RM1.9bil). The magazine had valued his share of the Adidas partnership at US$1.5bil (RM7.1bil).
The remainder of Ye’s wealth comes from real estate, cash, his music catalogue and a 5% stake in ex-wife Kim Kardashian’s shapewear firm, Skims, Forbes said.
Representatives for Ye, formerly known as Kanye West, did not immediately respond to a request for comment.
For Adidas, ending the partnership and the production of Yeezy branded products, as well as stopping all payments to Ye and his companies, will have a "short-term negative impact" of up to €250mil (RM1.2bil) on net income this year, the company said.
Ye has courted controversy in recent months by publicly ending major corporate tie-ups and making outbursts on social media against other celebrities. His Twitter and Instagram accounts were restricted, with the social media platforms removing some of his online posts that users condemned as antisemitic.
In now-deleted Instagram posts earlier this year, the multiple Grammy award-winning artiste accused Adidas and US apparel retailer Gap Inc of failing to build contractually promised permanent stores for products from his Yeezy fashion line.
He also accused Adidas of stealing his designs for its own products.
On Tuesday (Oct 25), Gap, which had ended its partnership with Ye in September, said it was taking immediate steps to remove Yeezy Gap products from its stores and that it had shut down YeezyGap.com.
"Antisemitism, racism and hate in any form are inexcusable and not tolerated in accordance with our values," Gap said in a statement.
European fashion house Balenciaga has also cut ties with Ye, according to media reports.
"The saga of Ye ... underlines the importance of vetting celebrities thoroughly and avoiding those who are overly controversial or unstable," said Neil Saunders, managing director of GlobalData.
Adidas poached Ye from rival Nike Inc in 2013 and agreed to a new long-term partnership in 2016 in what the company then called "the most significant partnership created between a non-athlete and a sports brand".
The tie-up helped the German brand close the gap with Nike in the US market.
Yeezy sneakers, which cost between US$200 (RM946) and US$700 (RM3,312), generate about €1.5bil (RM7.1) in annual sales for Adidas, making up a little over 7% of its total revenue, according to estimates from Telsey Advisory Group.
Shares in Adidas, which cut its full-year forecast last week, closed down 3.2%. The group said it would provide more information as part of its upcoming Q3 earnings announcement on Nov. 9. – Reuters