Adidas Risks Partnership with Kanye West
Christian. Father. Artist. Fashionista. These are some of the titles that “Ye,” formerly known as Kanye West, claims. However, one of his titles that has been making the news lately is that of “Businessman.” Ye is currently engaged in two high-profile business disputes with billions of dollars on the line. These businesses should not underestimate the power Ye holds in the success of their respective clothing lines and should give him the freedom he needs to create valuable products.
Ye is the owner of the multi-billion dollar “Yeezy” brand in collaboration with Adidas and, until September 2022, Gap. Since it was founded in 2015, Yeezy has raked in billions of dollars in revenue, and in 2021, the line accounted for nearly seven percent of Adidas’ total worldwide income. Seeing the success of Adidas’ partnership with Ye, the ailing Gap brand struck a deal with Yeezy in June 2020. This collaboration came nearly 15 years after Ye dropped lyrics about working in Gap retail stores on his College Dropout track, “Spaceship.” The deal was supposed to renew interest in Gap, and it had great initial promise. Yeezy Gap released several items in 2021, such as the “Perfect Hoodie” and the “Round Jacket,” both of which were very popular and sold out soon after their release. With plans to release more anticipated items in 2022, things seemed to be on the right course.
However, in August, Ye took to Instagram to air his grievances against the corporation. At the end of the same month, he posted a picture of his upcoming Yeezy Gap sunglasses with a caption that read: “Gap held a meeting about me without me?” Ye followed this post by uploading a six-minute Instagram video in which he was filmed speaking to a room full of Gap employees, including its CEO. Among other things, Ye spoke about how he desired more ownership over the direction of Yeezy Gap: “We canceled the pre-order of the blue jacket. That’s insane… We sold 14 million hoodies at $80 with no logo on it off of one commercial, and never ran the commercial again. That’s insane.” Towards the end of the video, Ye made an analogy comparing himself to Tom Brady leading a football team (Gap) to a Super Bowl ring. He passionately told the room that there would never be another creative mind who would care about Gap’s future as he did.
He emphasized that his rant was no joke and that it was his way or the highway. Ye didn’t just sour on Gap; in September, he went on the record with Bloomberg and spoke about wanting to end his deals with Adidas as well. In a word, Ye wanted more control over the creative direction of the companies and felt their executives were steering the ship in the wrong direction. Days later, Ye and Gap officially announced the end of their partnership. While the deal was supposed to last until 2030, Ye’s legal team accused Gap of breaching their contract by not selling Yeezy merchandise in-store as well as online. Furthermore, Ye accused Gap of not opening Yeezy Gap stores in 2021, as they had promised.
Naturally, many assumed that Ye would sever ties with Adidas as well, but their partnership has remained intact so far. Due to its annual revenue of nearly $2 billion in just Yeezy sales, it’s hard to overstate how important the Yeezy brand is to Adidas. The company, which hasn’t yet publicly acknowledged Ye’s accusations, has a few options, none of which are easy. Adidas must determine the best way to mend fences, whether that’s with a public apology, offering new financial incentives or granting greater control of the partnership (or some combination). Adidas could also move to cut ties, though the costs of antagonizing Ye further are likely too high for that to be worth consideration.
Any company that does not work with Ye to give him the resources he needs to create value are doing themselves a disservice. As one of the great musical artists of his generation and a man that created a brand worth billions off just his name, his talents are evident. It is unclear whether the future of Adidas and Yeezy will end up like Ye’s partnership with Gap or whether the partnership will reach new heights, but what is clear is this: when not giving a genius enough space to create, he will look for a different room.