Kanye West And Adidas Reach Settlement Over Yeezy Deal Termination
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Adidas has successfully reached an out-of-court settlement with Ye, formerly known as Kanye West, concluding all legal disputes related to the termination of their partnership. This settlement marks the end of a contentious relationship that began when Adidas severed ties with the rapper and his Yeezy brand in 2022, following allegations of antisemitic remarks made on social media.
“There are no open issues, and no money is changing hands,” Adidas CEO Bjorn Gulden stated during a conference call with reporters. “Both parties agreed that further conflict was unnecessary and have withdrawn all claims.” He emphasized that the drama with West “is now part of the past. No one owes anything to anyone anymore; what was is history.”
The Controversy that Changed Everything
Adidas’s decade-long partnership with Ye (formerly Kanye West) was once celebrated as one of the most successful collaborations in sportswear history. The Yeezy line not only propelled West to billionaire status but also revolutionized the sneaker industry with its innovative designs and devoted following. However, the partnership took a dramatic turn in October 2022, when West made a series of increasingly controversial public statements, including antisemitic remarks in which he claimed he was “going death con 3 on JEWISH PEOPLE.”
In response to West’s erratic behavior, Adidas swiftly announced the termination of their partnership, condemning his remarks as “unacceptable, hateful, and dangerous.” Other major companies, including Balenciaga and CAA, one of the largest celebrity talent agencies in the U.S., also severed ties with the musician.
This decisive action by Adidas underscored its commitment to diversity and inclusion and marked a significant turning point not only for the two parties involved but for the broader fashion industry as well.
Adidas and Ye: A Legal Battle
The fallout from the split between Adidas and Ye has proven to be significant, with the company left grappling with an inventory of unsold Yeezy products valued at approximately $1.3 billion. This surplus directly contributed to a considerable loss of $655 million in sales during the final quarter of 2022. However, the ramifications of the breakup extend beyond mere financial losses.
Court documents indicate that Adidas sought to reclaim $75 million from Yeezy, alleging that these funds had been improperly deposited into the company’s accounts. When Yeezy declined to comply, Adidas initiated legal action to secure a court order to freeze the contested funds. Although a judge initially granted Adidas’s request, the order was later overturned, allowing Yeezy access to the funds. This legal entanglement ultimately culminated in the dissolution of their partnership.
The recent settlement signifies the conclusion of a tumultuous chapter for both Adidas and Ye. The sportswear giant is now focused on a strategic path forward, which includes rebranding remaining Yeezy products and exploring new collaborative opportunities. Adidas aims to liquidate the remaining Yeezy inventory by the end of 2024, signifying a pivotal shift in its business strategy.
Featured image: Jonathan Leibson/Getty Images
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