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What happens to the Yeezy line after adidas severed ties with Kanye West?

By NICK GARCIA Published Oct 26, 2022 12:56 pm

German sportswear brand adidas severed ties with American rapper-turned-designer Kanye West, following the spate of his antisemitic remarks.

West, now known as Ye, has launched tirades against the Jewish community anew—and has made unfounded claims and conspiracy theories about them in recent media appearances.

"adidas does not tolerate antisemitism and any other sort of hate speech," the company said in a statement 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."

adidas, "with immediate effect," said it will not carry West's popular Yeezy sneakers, ending all of its production and stopping all payments to him and his companies.

So what's the impact of their partnership's termination?

According to Forbes magazine, West already lost his billionaire status after his net worth shrank to $400 million.

As for adidas, the company said there will be a "short-term negative impact" of missing about $250 million in profits this year.

The Yeezy sneakers, which cost between $200 and $700 (P11,000 to P41,000), generate about $1.5 billion in annual sales for Adidas—based on estimates from New York-based equity research firm Telsey Advisory Group, as Reuters reported. This represents about 7% of its total revenue, according to Telsey.

In any case, adidas has yet to offset its COVID-19 losses, and the terminated business partnership with West will surely leave a dent in the company.

On the bright side of things, adidas may have saved itself from further public relations disaster—and eventually getting "cancelledt."

Many consumers and celebrities were calling on adidas to end its partnership with West amid his antisemitic remarks. Some even vowed to boycott the brand.

While adidas hasn't explicitly stated it just yet, Wall Street analyst Aneesha Sherman told Yahoo! Finance that it "won't obviously use" the Yeezy name anymore. Sherman, however, believes the company will continue to launch designs.

Sherman also thinks that adidas will retain some of the Yeezy sales, noting the company won't lose that $1.5 billion. Still, adidas will "take a haircut" for its anticipated departure from the brand name, she added.