The encyclopedia · Advertising & PR · Marketing decision · 2022–2023
Adidas ended its $2B-a-year Yeezy line over Ye's remarks
Adidas terminated Yeezy with one statement, stopped all payments, took a €250M hit and posted its first annual net loss in three decades.
Adidas · Gap · Balenciaga · 2022-10-25
What happened
On 25 October 2022 Adidas terminated its partnership with Ye with immediate effect, ending production of Yeezy branded products and stopping all payments to him. Its statement said the company 'does not tolerate antisemitism and any other sort of hate speech', calling his recent comments and actions 'unacceptable, hateful and dangerous'. Yeezy was worth nearly $2 billion a year to Adidas — around 10% of its revenue, and the line that had brought its North America business back to relevance.
The split was the last step in a week-long exodus: Balenciaga ended its partnership on 21 October, and Gap pulled all Yeezy Gap products from its stores and closed the label's website on 25 October. Adidas itself warned the termination would cut up to €250 million from its 2022 net income, and in March 2023 it said an unsold Yeezy inventory could mean an operating loss of up to €700 million for the year.
Why it happened
- Yeezy was not a product line but a person: roughly $2 billion of annual revenue sat on the public behaviour of one man, so one statement wiped out the whole line at once.
- Adidas's own words priced the decision: up to €250 million in 2022, then a warning of up to €700 million in operating losses if the Yeezy stock could not be sold.
- The same week Gap emptied its stores and Balenciaga ended its collaboration — the value of the deal evaporated for every partner at the same time.
The lesson
When a line of business is one person's name, the brand cannot wait for the market to react: the statement came first, and the write-off was the only number left to negotiate.
Aftermath
Adidas sold the leftover Yeezy inventory piece by piece through 2023; its FY2023 results showed the company's first annual net loss since 1992, of €58 million, and the remaining stock was sold at cost in 2024.
Sources
- adidas terminates partnership with Ye immediately — official press release, 25 October 2022
- Adidas terminates partnership with Ye after antisemitic remarks — CNBC, 25 October 2022
- Balenciaga cuts partnership with Kanye West — CNN Business, 21 October 2022
- Gap is pulling all the Yeezy clothes from its stores — Fortune, 25 October 2022
- Adidas posts first net loss in three decades after Yeezy collapse — Retail Dive, March 2024
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