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Adidas Blew the Kanye Controversy, but Your Brand Can Avoid the Same Mistakes

By Jeff Beer for Fast Company

“I can say antisemitic things and Adidas can’t drop me. Now what? Now what?”

That was Kanye West on the Drink Champs podcast on October 16 daring Adidas to react to his recent behavior.

Ever since West—now known as Ye—signed on with Adidas in 2013, the artist has been the cultural story at the brand. That fact took a dark turn over the past month, as West has been criticized for antisemitic comments, leading the brand to cancel its landmark deal with him on October 25.

In its statement, Adidas said the company “does not tolerate antisemitism and any other sort of hate speech. 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.”

The company also said that it expects this move to have a short-term negative impact of up to $246 million on the company’s net income in 2022. According to Morningstar analyst David Swartz, the Yeezy brand makes nearly $2 billion a year for Adidas, or 10% of its overall revenue.

Adidas reportedly put its relationship with Ye under review on October 6, a full 20 days before cutting ties, and after other companies like Balenciaga and CAA had already done so. Now, of course, this is a massive piece of Adidas business, and a move like this would impact not only the bottom line, but also many employees and operations. One cannot just decide to dump $2 billion of your revenue with a Thanos-like snap.

But even accounting for that, this was a glacial pace. To put in context, it took Adidas 12 days after Russia invaded Ukraine to announce it was suspending sales across its 500 stores in Russia, cutting 1% from its expected revenue growth this year. British Petroleum—not exactly a cuddly brand overly worried with being “woke”—took about three days to announce it would be offloading the nearly 20% stake it had in a Russian oil company, worth about $14 billion.

Adidas’ silence over those 20 days was deafening enough for social media to call for its boycott, resurface company history about its founders’ involvement with the Nazi party, and for employees to speak out.  For more, click here.

Image by sbl0323 from Pixabay

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