Oct 25 (Reuters) – Adidas AG (ADSGn.DE) ended its partnership with rapper and fashion designer Ye on Tuesday after he made a series of anti-Semitic remarks, a move that removed the musician from the Forbes list of billionaires of the world.
Adidas put the link, which produced several best-selling Yeezy-branded sneakers, under review this month.
“Adidas does not tolerate anti-Semitism and any other type of hate speech,” the German company said on Tuesday.
“Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values โโof diversity and inclusion, mutual respect and fairness,” he said.
Forbes magazine said the end of the deal meant Ye’s net worth had dropped to $400 million. The magazine had valued its share of the Adidas partnership at $1.5 billion.
The rest of Ye’s wealth comes from real estate, cash, his music catalog and a 5% stake in Skims, the shapewear company of ex-wife Kim Kardashian, a said Forbes.
Representatives for Ye, formerly known as Kanye West, did not immediately respond to a request for comment.
For Adidas, the end of the partnership and the production of Yeezy-branded products, as well as the cessation of all payments to Ye and his companies, will have a “negative short-term impact” of up to 250 million euros ( $248.90 million) on net income this year, the company said.
Ye has courted controversy in recent months by publicly ending major corporate ties and going on social media outbursts against other celebrities. His Twitter and Instagram accounts were restricted, with social media platforms deleting some of his online posts that users condemned as anti-Semitic.
In now-deleted Instagram posts earlier this year, the Grammy-winning artist accused Adidas and US clothing retailer Gap Inc
He also accused Adidas of stealing his designs for its own products.
On Tuesday, Gap, which ended its partnership with Ye in September, said it was taking immediate action to remove Yeezy Gap products from its stores and shut down YeezyGap.com.
“Anti-Semitism, racism and hatred in any form are inexcusable and will not be tolerated consistent with our values,” Gap said in a statement.
European fashion house Balenciaga has also severed ties with Ye, according to media reports.
“The saga of Ye…underscores the importance of carefully vetting celebrities and avoiding those who are too controversial or unstable,” said Neil Saunders, chief executive of GlobalData.
Adidas poached Ye from rival Nike Inc (NKE.N) in 2013 and agreed to a new long-term partnership in 2016 in what the company then called “the most significant partnership ever created between a non-athlete and a sports brand. sport”.
The merger helped the German brand close the gap with Nike in the US market.
Yeezy sneakers, which cost between $200 and $700, generate about 1.5 billion euros ($1.47 billion) in annual sales for Adidas, or just over 7% of its total revenue. as estimated by Telsey Advisory Group.
Shares of Adidas, which cut its forecast for the full year last week, closed down 3.2%. The group said it would provide more information as part of its next third-quarter earnings announcement on Nov. 9.
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Reporting by Mrinmay Dey, Uday Sampath and Aishwarya Venugopal in Bengaluru and Lisa Richwine in Los Angeles; Editing by Tomasz Janowski, Sriraj Kalluvila, Bernadette Baum, Anil D’Silva and Cynthia Osterman
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