Kanye West: What took Adidas, Gap and others so long to cut ties?



New York
CNN business

Earlier this week Adidas ended its partnership with rapper and fashion designer Ye (formerly Kanye West). His decision came around the same time other companies cut ties with the artist, but weeks after Ye began making offensive comments.

Many wondered: what took Adidas and others so long?

Ultimately, Ye’s behavior was troubling sometime He called out Adidas directly in a podcast appearance when he made anti-Semitic comments, saying the company would proudly not cut ties with him.

The latest saga began in early October, when he wore a shirt with the slogan “White Lives Matter,” a statement the Anti-Defamation League has linked to the Ku Klux Klan. At the time, Adidas, which first teamed up with the artist in 2013 to make Yeezy-branded shoes and clothing, said it was considering a collaboration.

Then, during an appearance on a “Drink Champs” podcast episode over the weekend of October 16, Ye repeated anti-Semitic conspiracy theories among other offensive claims. He made a direct reference to Adidas: “I can say anti-Semitic things, and Adidas can’t let me,” he said. “Now what?”

For several days, that seemed to be true.

Adidas didn’t announce it was severing ties with Ye until Tuesday, Oct. 25, more than a week after the podcast was released.

In that statement, the company said it “does not tolerate anti-Semitism and other hate speech,” calling Ye’s latest comments “unacceptable, hateful and dangerous” and violating the company’s “values ​​of diversity and inclusion, mutual respect and mutual respect.” righteousness”.

Adidas wasn’t the only company to take its time: Balenciaga cut ties with Ye last week, and while Gap and Ye parted ways in September, it didn’t take the Yeezy Gap line off the shelves until this week. Foot Locker also said this week it would remove Yeezy products, and TJ Maxx said it would no longer buy the items on sale in stores.

But Adidas stepped up after Ye’s comments on the “Drink Champs” podcast.

Why the delay? In this situation, companies face a dilemma, said Andrew Gilman, founder and CEO of CommCore, a consulting group specializing in crisis communications. On the one hand, “they must be very fast”, he said. “At the same time, they want to be intentional.”

Walking that tightrope, companies can slip. And one wrong move can have consequences for their finances and reputation.

It looks like Adidas’ last straw was the image that went viral this weekend. Pictures taken from a freeway overpass in Los Angeles show a small group of protesters with their arms raised behind banners that look like Nazi salutes that read, “You know it” and “Kanye is right about the Jews.”

As the image gained traction online, pressure mounted for Adidas to take a stand.

The incident “woke up these companies,” said Amy Shanler, an associate professor of public relations at Boston University College of Communication, referring to companies other than Adidas that cut ties with Ye this week. They realized “it’s not just Kanye talking to Kanye… there are other people listening.”

Those people who confirmed Ye’s anti-Semitic message are not the ones companies want to associate with. From their point of view, “we cannot associate at all – not even a second-degree association – with these hate groups,” Shanler said.

As for previous incidents, Shanler noted that companies don’t always know how far is too far, even though critics have called them out. Also, companies may be afraid that when faced with a controversial event, they will end up announcing it.

And they’re nervous about being the first to take a stand.

“When you’re first, you become the most visible, the first brand that everyone talks about,” Shanler said. “When you’re not the first, it’s a lot easier to get on that path.”

And then, in the case of Adidas in particular, there are the economic consequences of breaking ties.

Adidas will take 250 million euros (about $249 million) in the fourth quarter as a result of the decision, the company announced this week. Things can only get worse from there, says Douglas Hand, a fashion attorney who is a partner at Baldachin & Associates.

“That’s just a short-term effect,” he said. “Kanye and Yeezy were a significant element of their revenue and profitability,” he said. “They’re really shutting down a brand that’s been very, very successful for them.”

Yeezy products generated nearly $2 trillion in sales for Adidas last year, 8% of the company’s revenue, according to Morgan Stanley. The line helped Adidas attract new customers and gain more shelf space in stores. (Adidas said it remains the “sole owner of all existing product design rights and the sole owner of previous and new colorways” in its partnership with Ye.)

Adidas said that it will have a big loss in the fourth quarter because it connects with Ye.

Adidas has a financial obligation to its shareholders. Before walking away from such a lucrative deal, he needs to make sure it’s the right move.

Most public companies “are heavily burdened with financial decisions beyond mission-aligned decisions,” Hand said.

But dragging your feet comes with costs.

The company can damage its reputation. It is not yet clear whether that will happen in this case, Gilman said. “What they lose depends on how strong the brand is to begin with,” Gilman said.

And by staying silent in the days following Ye’s podcast appearance, Shanler said, Adidas “missed an opportunity to make a powerful and unwavering statement against anti-Semitism.”

– CNN Jordan Valinsky, Sonya Hamasaki and Nathaniel Meyersohn contributed to this report.