Bad News For Ye: Adidas End Partnership With Kanye West
Adidas has announced the end of its partnership with Kanye West. Here is what happened and How it might affect Yeezy sneakers going forward.
The recent “Anti-Semitic” comments by Kanye West on Twitter stirred up a storm almost a week ago, and it will surely make a dent in Kanye’s massive bank account. Today, we go through the details of why Adidas ended its partnership with Kanye West.
We’ll also be talking about its resale implications on the Yeezy shoes as well as other effects it might have on the brand’s future.
Before we get into the Adidas deal, what exactly happened to cause Adidas End Partnership With Kanye West?
A Billion Dollar Mistake
Ye, formerly known as Kanye West, has recently endorsed antisemitic cliches about Jewish intimidation, power, and control using his media platform and social power.
Ye proudly said that “no one can threaten or influence me” while posting images of text exchanges on Instagram, indicating that Jews are intimidating him with their alleged grip over his colleagues in the music business. Since then, the post has been removed.
Ye continued by claiming that Jews “toyed” with him and “tried to blackball everyone who opposes” their “agenda.” Later, Twitter removed this message in which Ye ominously threatened to “go death con 3 on JEWISH PEOPLE,” heightening the possibility of conflict.
Ye accused Mark Zuckerberg, the CEO of Meta, the company that owns Instagram, of deleting him off the platform in a different tweet.
In a subsequent tweet, he asked, “Who do you suppose developed the cancel culture?”
According to a Twitter official, Ye’s account was locked for breaking the site’s rules. According to a Meta representative, it restricts accounts that persistently flout company policies.
Ye’s representatives were not immediately available.
Ye’s account is still live on Twitter and Instagram despite the limitations, but the rapper is unable to post for an unspecified amount of time.
Ye had been absent from Twitter for over two years until posting again on Saturday.
The posts served as yet another test of the social media corporations’ readiness to keep an eye out for potentially offensive material.
Celebrities and Jewish organizations strongly attacked the T-shirt design and the social media posts, claiming they reflected racist and antisemitic views.
White racists use the term “White Lives Matter,” according to the Anti-Defamation League.
Ye said on Instagram at first that “my one t-shirt got allllll the attention,” giving the impression that he was enjoying the T-shirt issue.
But internet outcry from various musicians, including Mr. Combs, kept rising, and this was a small part of his Billion Dollar mistake that would risk most of his companies.
Kanye West’s Partnership With Adidas Terminated
In a recent statement by Adidas on October 25th, the three stripes concluded that “After a thorough review, the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products, and stop all payments to Ye and his companies. Adidas will stop the Adidas Yeezy business with immediate effect.”
That is very bad news for Yeezy, as up till this day, the duo had been unstoppable. Ye stopped his partnership with Nike, which was also very successful but could not proceed.
West wanted not only royalties but, more importantly, full creative control, which Nike did not allow.
As a result, Kanye ended the partnership and left for Adidas, which welcomed him with open arms and full creative control. The duo then came up with the insanely popular Adidas Yeezy 350 V1, which still resells for multiple times its resale value.
As a side effect of this statement, Adidas shares are plummeting and on a sharp decline. There were already supply chain issues with China, and the fact that shares were already down by 70% of their value since 2021.
Adidas also states that they will lose over €250 million in total annular net income. In short, investors of Adidas are also definitely worried about the trajectory of the company. With Kanye gone, this will likely only drive them further back.
The brand predicted that ending the Yeezy collaboration will have a negative impact on Adidas’s net income in 2022 of €250 million due to the “strong seasonality of the fourth quarter,” which includes Black Friday and Christmas. However, the firm stated that it expects the decline to be temporary.
A caution to West’s team should the rapper try to replicate the designs with a different manufacturer was undoubtedly included in Adidas’ statement that it is the “sole owner of all design rights” under the collaboration.
It was verified in a Forbes article that the action had also lost the rapper his billionaire title. The article estimates that West’s relationship with Adidas contributed almost $1.5 billion of his net worth; therefore, the termination of the agreement reduced his wealth to $400 million.
According to the journal, his music collection, real estate assets, cash, and his 5% ownership position in Skims, his ex-wife Kim Kardashian’s shapewear company, make up the majority of his residual net worth.
Unfortunately for him, that is not the end of his worries.
More Fleeting Partnerships and Contracts
The Three Stripes has ceased manufacturing all Yeezy products as part of its break-up and has instructed all stockists of the brand, including sneaker shops, big-box stores, and other retailers, to remove all Yeezy merchandise.
The most well-known company mentioned in connection with the news that Ye’s designs are no longer being offered in-store and online is Foot Locker, Inc. Footwear News said that on Tuesday afternoon, an email was distributed to staff members requesting that Yeezy merchandise be placed in the backroom until further notice.
Given that the North American store owns the GOAT app, a well-known resale tool that may be used to get rid of stockroom products, some internet users have expressed skepticism about what Foot Locker will do with unsold Yeezy merchandise.
Shortly after the news that Adidas had dissolved its association with Ye was public, many pairs of previous Yeezy releases sold out on websites like GOAT.
The Three Stripes have made it obvious that Mr. West does not possess the patents for his items, thus, the market for them is now unstable but is anticipated to see a boom soon. Albeit a short-lived one.
According to sources who have received orders straight from Adidas, Yeezy items should no longer be sold at shoe stores.
He was removed from Balenciaga’s photos and videos of the fashion show, which launched in Paris this month with an unexpected modeling presence. On Vogue Runway, the site of choice for fashion presentations, similar pictures vanished.
Additionally, Ye was referred to as a “small minority stakeholder” by Skims, the shapewear company founded by Ye’s ex-wife, Kim Kardashian, that he allegedly helped shape in terms of design and aesthetics. Skims also stated that Ye “had only a minority stake Skims.”
According to a corporate spokesman, Ye is no longer represented by the Creative Artists Agency, one of the biggest booking agencies in the world.
Following Ye’s antisemitic rants, the film and television studio MRC stated on Monday that it was shelving a finished documentary about him.
All of this is quite bad, but what does that say about the original Yeezys, and what happens to it?
So, What Happens To Yeezys Now?
Hype for Yeezys was at an all-time high when they released a few years ago; however, that changed recently when Ye released too many of them, as his vision included everyone owning a pair.
It is unlikely that his comments will dissuade sneakerheads from buying his Yeezys, and in the short run, I expect a rise in recent sales of “the last” Yeezys that are set to release soon. Although Adidas still has the rights to the designs of the Yeezy models, I expect all colorways following the termination to not do so well at all in terms of sales and hype.
Adidas’ stock is already on the decline, and without Yeezy’s most important element, Ye himself, resale for the sneakers will likely decline sharply after the end of the partnership. Although I do recommend, you keep an eye out for the upcoming colorways.
On the other hand, past colorways will likely also change and see an increase in their resale values.
OG releases especially will likely appreciate because of this. If you want to learn all there is to know about sneaker reselling, read our updated Hypemaster Playbook!