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Oct 25 (Reuters) – Adidas AG ( ADSGn.DE ) is immediately ending its partnership with Kanye West, the sporting goods maker said on Tuesday, in reaction to a rash of offensive behavior by the American rapper and designer.
“Adidas does not tolerate anti-Semitism or any other type of hate speech,” the German company said.
“Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and violate the company’s values of diversity and inclusion, mutual respect and fairness,” it said, using the rapper’s stage name.
An attorney representing Kanye West did not respond to a request for comment.
Ending the partnership and production of Yeezy-branded products, as well as stopping all payments to Ye and his companies “will have a short-term negative impact” of up to $250 million” on the net income of Adidas this year, the company said, partly because the Christmas quarter is usually in higher demand.
Adidas reviewed the partnership in early October “after repeated efforts to privately resolve the situation.”
Ye has sparked controversy in recent months by publicly ending major corporate relationships and by lashing out at other celebrities on social media. His Twitter and Instagram accounts were restricted, and the social media platforms removed some of his online posts that users condemned as anti-Semitic.
In now-deleted Instagram posts from earlier this year, the multiple Grammy Award-winning artist accused Adidas and U.S. clothing retailer Gap Inc ( GPS.N ) of failing to build contractually promised permanent stores for the products from his Yeezy fashion line.
He also accused Adidas of stealing his designs for their own products.
Gap and Ye ended their partnership in September. European fashion house Balenciaga has also cut ties with Ye, according to media reports.
Adidas poached Ye from rival Nike Inc ( NKE.N ) in 2013 and agreed a new long-term partnership in 2016 in what the company called at the time “the most significant partnership ever created between a non-athlete and a sports brand.” .
The tie-up, which produced several of Adidas’ best-selling “Yeezy” sneakers priced between $200 and $700, helped the German brand close the gap with Nike in the U.S. market.
Yeezy generates about 1.5 billion euros ($1.47 billion) in annual sales for Adidas, accounting for just over 7 percent of its total revenue, according to estimates by Telsey Advisory Group.
Shares in Adidas, which cut its full-year forecast last week, fell about 3.8%. The group said it will provide more information as part of its upcoming third-quarter earnings announcement on November 9.
Reporting by Mrinmay Dey and Uday Sampath in Bangalore; Editing by Tomasz Janowski, Sriraj Kalluvila and Bernadette Baum
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