In November 2013, Adidas sales in North America, the most critical territory for sportswear sales, were down 1% for the year. Across the company, sales were flat.
The company had just five shoes on the influential Complex list of best 50 sneakers of 2013. Industry leader Nike had 30 shoes on the list and had just reported an 8% annual sales increase.
But that same month, Adidas announced a partnership with Kanye West, the polarizing musician and fashion designer, now known as Ye.
Three years later, Adidas reported an 18% annual sales increase, more than doubling Nike's fiscal-year percentage gain. Yahoo Finance named Adidas Sports Business of the Year, citing a string of hot products, including the NMD, Ultra Boost, and West's Yeezy, and the company's ability to capitalize on a consumer shift away from performance products to more casual athleticwear.
While analysts debated West's role in the company's resurgence, Mark King, who was the president of the North America division at the time, gave credit to the artist.
"I think Kanye definitely helped make the brand cool again," he told Yahoo Finance in 2016. "But I think, had it only been Kanye, it would have gone up and gone down very quickly."
By 2019 West had started referring to himself as "Ye" — legally changing his name to it in 2021 — and Adidas sales of Yeezy products had surpassed $1 billion for the first time. But Ye's relationship with Adidas had also started to deteriorate.
In a 2018 interview with TMZ, Ye said slavery "sounds like a choice," prompting Adidas' CEO, Kasper Rorsted, to defend him on CNBC. More criticism followed after Ye wore a "Make America Great Again" hat on "Saturday Night Live" and met with then President Donald Trump in the Oval Office.
Despite the turbulence, Adidas Yeezy sales continued to grow. In February 2021, the financial-services company UBS projected sales would hit $2 billion for the year and would continue climbing, according to an internal document viewed by Insider.
But Ye's partnership ultimately ended last month after the artist made repeated antisemitic comments. Adidas cut ties with him on October 25 and said it would immediately bring the Yeezy business to a halt, with the company expecting its bottom line to take a $247 million hit for the year.
"Adidas does not tolerate antisemitism and any other sort of hate speech," the company said. "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.
David Swartz, a Morningstar analyst, called the end of the deal significant but said that the long-term impact on the brand is less clear, given Adidas owns its Yeezy designs and the company remains more of a sportswear than a streetwear brand. He noted that for Adidas and its competitors, China remains a bigger problem than any single endorsement deal because Western brands are falling out of favor with Chinese consumers.
Analysts expect Nike to get a short-term boost, given its dominance of the market for hyped sneakers.
"If all of a sudden that customer who was buying a couple pairs of Yeezys every year now finds themselves with a few 100 extra dollars in their budget every year, the most likely direction they're going to go with that money is Nike: the Jordans and the Dunks," Tom Nikic, a Wedbush analyst, previously told Insider.
But Adidas could already be positioning itself to reignite its popularity with the most influential sneaker collectors.
This week Adidas confirmed speculation and named the former Puma CEO Bjørn Gulden the next CEO of Adidas. Among Gulden's accomplishments at Puma: building the brand's credibility with celebrities ranging like Rihanna and Jay-Z.
"We think this is one of the best hires they could make," Nikic wrote in a note to investors.
Below is a timeline of Ye's relationship with Adidas.
Global stocks rally even as Sensex, Nifty fall sharply on Friday
In second consecutive week of decline, forex kitty drops $2.28 bn to $640.33 bn
SBI Life Q4 profit rises 4% to ₹811 crore
Next Story
