Adidas Ends Kanye West Partnership, Gap Pulls Yeezy Products Over Rapper’s Anti-Semitic Remarks

Adidas AG said it would end its partnership with Kanye West and Gap Inc. said it would pull apparel he helped design from its stores, after a string of controversies including a recent anti-Semitic outburst from the musician and fashion-brand owner.

Adidas’s decision, which ends a lucrative arrangement that has produced the popular Yeezy collection of sneakers, comes after weeks of pressure on the German sportswear company from human-rights advocates and after other businesses severed their ties with Mr. West, who goes by Ye.

Gap, which ended its partnership with Mr. West in September but was still selling items it had already produced, said Tuesday that it was removing Yeezy Gap products from its stores and had shut down a website that was still selling hoodies and other merchandise from the partnership.

“Our former partner’s recent remarks and behaviour further underscore why” Gap ended its partnership, the retailer said in a statement.

Mr. West and his representatives didn’t immediately respond to requests for comment. He has publicly complained about Adidas and Gap, accusing the companies of stealing his designs and breaking promises to expand his ventures. He had said that he was key to Adidas’s success. “I can say antisemitic things and Adidas can’t drop me. Now what?” he said in a podcast that aired earlier this month.

In early October, Mr. West appeared at his Yzy fashion show in Paris wearing a “White Lives Matter” shirt, a slogan often used by white supremacist groups, and a week later wrote a tweet that said in part that he planned to go “death con [sic] 3 on Jewish people.”

Film-and-television studio MRC and French fashion house Balenciaga are among companies that have distanced themselves from Mr. West in recent weeks. The talent agency CAA has dropped Mr. West as a client, according to a person familiar with the matter.

On Oct. 6, Adidas put its partnership with Mr. West under review. Days later, Twitter Inc. and Meta Platforms Inc.’s Instagram locked his accounts after he made anti-Semitic posts.

Adidas said Tuesday that Mr. West’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.”

The breakup adds another major headwind for Adidas, which has been struggling to grow in China, the largest apparel and footwear market in the world. Adidas is also in the midst of searching for a new chief executive after the company unexpectedly said in August that its current leader, Kasper Rorsted, will step down next year.

“The termination of the partnership with Kanye West is understandable and necessary. Financially, the termination is a heavy blow,” said Ingo Speich, head of sustainability and corporate governance at German fund manager Deka Investment, which holds 0.7% of Adidas. “It remains to be hoped that no further partnerships will be lost.”

Adidas said it would terminate the partnership immediately, end production of Yeezy branded products and stop all payments to Mr. West and his companies. The decision is expected to have a short-term hit of up to €250 million, equivalent to $247 million, on the company’s net income in 2022, the company said.

Adidas shares fell more than 3% in Frankfurt trading Tuesday. They are down more than 60% this year.

Over the weekend, protesters in Los Angeles held a banner above a major freeway expressing support for Mr. West’s statements. “Kanye is right about the Jews,” it read.

After photos of the incident circulated on social media, a chorus of celebrities condemned anti-Semitism in online posts, including Kim Kardashian, who filed for divorce from Mr. West in 2021.

“Hate speech is never OK or excusable,” she wrote on Twitter on Monday. “I stand together with the Jewish community and call on the terrible violence and hateful rhetoric towards them to come to an immediate end.”

Human-rights campaigners in recent days had publicly criticised Adidas over its partnership with Mr. West. On Tuesday, the Central Council of Jews in Germany called on the company to end its partnership with the artist.

“As a German company, I simply expect from Adidas a clear stance when it comes to anti-Semitism,” the organisation’s president, Dr. Josef Schuster, said on Twitter. “Entrepreneurial interests must not be the priority.”

Addressing Adidas, Jonathan Greenblatt, chief executive of the Anti-Defamation League, tweeted on Monday that “your silence is a danger to Jews.”

Adidas on Tuesday said it “does not tolerate anti-Semitism and any other sort of hate speech.”

Mr. West’s ventures in sneakers date to at least 2006 when he first collaborated with Adidas on a shoe that was never released. A year later the rapper started working with Nike Inc. and eventually released the coveted Nike Air Yeezy II, which included the famed Red Octobers. The Nike partnership ended in 2013.

Items that the artist designed in collaboration with Adidas made their debut in 2015, and the parties entered a long-term partnership the following year.

In the arrangement, Mr. West lends the Yeezy brand to the company in return for royalties of about 15% of the sales of Yeezy products. Adidas designs and manufactures the products, and it owns the designs, according to people familiar with the deal.

The partnership has been a boon for Adidas. The tie-up accounts for as much as 8% of Adidas’s total sales, analysts at UBS said in a report last week.

Without the partnership, the company’s annual sales have grown just 1% on average since 2017 compared with the actual sales growth of 3%, UBS estimated. Adidas has said that its partnership with Yeezy was one of the most successful collaborations in the industry.

But in recent months, Mr. West has criticised Adidas, as well as Gap, on social media. Gap decided to end its relationship with Mr. West last month, saying the company and Mr. West are “not aligned” in how they work together, The Wall Street Journal has reported.

Earlier this month, Adidas said it made repeated attempts to privately resolve disputes with Mr. West.

The breakup with Mr. West piles further pressure on the sporting goods maker, days after it cut its full-year guidance, citing a weaker business environment in China as well as a significant inventory buildup as a result of lower consumer demand in major Western markets. Other factors, such as suspended operations in Russia and the supply-chain problems that have engulfed global business, have contributed to the company’s lacklustre performance lately.

The company said on Thursday that it now expects currency-neutral revenue to grow by a mid-single-digit percentage rate in 2022, down from a mid- to high-single-digit percentage forecast previously.

Corrections & Amplifications
The musician and fashion-brand owner is Kanye West. An earlier version of this article incorrectly called him Kayne West in one instance. (Corrected on Oct. 25)