Back
~
1
min read
· Posted on
February 21, 2024

It's time to go: Ye. Adidas has cut ties with Ye (FKA Kanye West) after a his anti-semitic and racist outbursts.

Adidas cut ties with Ye over a number of anti-Semitic tweets and comments.

What's the key learning?

  • Yeezy products generated nearly $2 billion in sales last year for Adidas, which is 8% of the company's total sales.
  • Adidas cut ties with Ye over a number of anti-Semitic tweets and comments, a move that will result in a $246 million hit to Adidas' fourth quarter sales.
  • Celebrity brand-deals come with enormous upside for brand promotion but brands are also aware of the enormous brand risk if something goes wrong.

👉Background: Back in 2013, Adidas struck a deal with Kanye West, now known as Ye, to create Yeezy-branded shoes and clothing collections. This has been called “most significant partnership ever created between an athletic brand and a non-athlete".

👉 What happened: Yeezy products generated nearly $2 billion in sales last year for Adidas. That’s 8% of the company’s total sales, according to Morgan Stanley.

👉 What else: But earlier this week, Adidas cut ties with Ye over a number of anti-Semitic tweets and comments. This move will result in a $246 million hit to Adidas’ fourth quarter sales. And this really highlights the dangers of celebrity endorsers.

What's the key learning?

💡Celebrity brand-deals come with enormous upside for brand promotion but brands are also aware of the enormous brand risk if something goes wrong (think: racist rants, sexual harassment or cheating scandals).

💡But for many brands, the potential reward is worth it. In fact, a 2012 study found that celebrity endorsements from athletes can increase a brand’s sales by 4%.

💡And Adidas aren't the only ones - major brands like Gap and Balenciaga also bet big on Ye. It highlights the importance of vetting brand ambassadors thoroughly before signing on the dotted line.

Ready to win at money?

Sign up for Flux and join 100,000 members of the Flux family

A button to App StoreGoogle Play store button
Excellent  4.9 out of 5
Star rating