How Adidas and Gap were caught in Ye's brand trap

This story has been updated with comments from Gap. Gap’s Yeezy e-commerce site was still active. Adidas was still deliberating about its embattled partnership. Meanwhile, the intensity of criticism was mounting against their antagonistic collaborator, Ye, who used to go by Kanye West. Now, Adidas has severed its ties with the star, following mounting public pressure. Plus, Gap discontinued its Yeezy Gap website, which sold merch related to Ye’s brand leftover from the doomed venture, and is pulling the products from its stores. On Monday, the public backlash grew, calling on Adidas to drop Ye, the artist behind Yeezy sneakers, over recent anti-Semitic remarks and comments that stirred George Floyd’s family to potentially sue the famous rapper. Adidas ended its relationship with the rapper on Oct. 25, after having not issued a statement about its troubled star since Oct. 6, when the company said it was reviewing the partnership. Following that statement a clip of Ye spread, talking on a recent podcast: “The thing about it being Adidas, I can say anti-Semitic things and Adidas can't drop me. Now what? Now what?” Ye asked the hosts. By late Monday, dissent was coming from inside Adidas. Sarah Camhi, director of trade marketing at Adidas and a “member of the Jewish community,” wrote a post on LinkedIn. “I can no longer stay silent on behalf of the brand that employs me,” Camhi wrote. “Not saying anything, is saying everything.” “We have dropped adidas athletes for using steroids and being difficult to work with but are unwilling to denounce hate speech, the perpetuation of dangerous stereotypes and blatant racism by one of our top brand partners,” Camhi said, adding, “until adidas takes a stand, I will not stand with Adidas.” On Tuesday, Adidas said it was ending its deal with Ye immediately. The company will take a hit of as much as €250 million ($246.5 million) to net income in the current fiscal year, Bloomberg reported. “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 said in a statement, according to Bloomberg. Ad Age Next: Streaming Get your tickets for the Nov. 10 event in New York and use the code AA50 for $50 off Register here Adidas, based in Herzogenaurach, Germany, did not return a request for comment on Monday. Bloomberg reported Adidas' breakup with Ye on Tuesday. Adidas' pricey brand crisis features one of the most influential artists, who has seemed to piss off almost everyone, except maybe extreme rightwing supporters carrying his banner (literally). The Anti-Defamation League called on Adidas to drop Ye. On Monday, CAA, the Hollywood talent agency, cut ties with Ye. Film studio MRC won’t distribute a new documentary about Ye. Last week, Balenciaga severed its relationship. In September, Gap and Ye parted ways after a blow-up of their billion-dollar collaboration. Yet Gap is in the thick of it because it is still sitting on Ye apparel that it is trying to sell. Many marketing experts did not see a way for the Adidas partnership to last. Ye’s Yeezy brand sneaker contributed 7% of Adidas’ revenue in 2021, generating $1.7 billion. “I don't see how they move forward with Ye,” said one ad agency executive, who is close to the music industry and spoke on condition of anonymity, before Adidas' announcement. “Adidas got themselves in a dangerous situation because so much of their comeback in the U.S. was powered by that partnership. As a brand that's a major loss of control when you're in bed with someone unstable, or worse.” “It’s a cascade. You don’t want to be the last brand,” said Americus Reed II, a marketing professor at the University of Pennsylvania’s Wharton School, prior to Adidas' statement. Reed predicted that Adidas would probably drop the partnership. ADL's petition against Adidas What Ye has said has been “so outrageous,” Reed said, that it would be tough to mend fences. “There’s a whole literature on how to respond to a brand crisis,” Reed said, “that I don’t think anyone in his inner circle is helping him execute.” Especially since Ye has not shown much interest in reconciliation with communities affected by his words. The ADL had said it was concerned that Adidas could try to ride out the controversy. “Mr. West’s biggest partner, Adidas, has not only remained silent,” the ADL said in a petition against Adidas, “but has doubled down on their relationship by planning to release new Kanye products on the fourth anniversary of the Pittsburgh synagogue massacre on Oct. 27.” On Tuesday, ADL CEO Jonathan Greenblatt updated the group’s statement, supportive of the steps Adidas took. “It illustrates that anti-Semitism is unacceptable and creates consequences,” Greenblatt said. Others weighing in on Tuesday included American Jewish Committee CEO Ted Deutch. “We welcome this decisive if belated action by Adidas,” Deutch said in a statement. “Other companies that profit from associating with West must also disabuse him of that notion. West could have been a force for positive change, given his position of vast influence and power. Instead, he chose to go down a hate-filled path that has made him a pariah.” Adidas on Tuesday referred to itself as the “sole owner of all design rights to existing products, as well as previous and new colorways,” under the partnership, according to Bloomberg. The company plans to provide more details when it reports third-quarter results on Nov. 9. Ye has always been a lightning rod of attention, but his latest antics appear to have set off a reckoning. In early October, Ye showed up at a Paris Fashion Week show wearing a T-shirt with the phrase “white lives matter,” which is considered an offensive retort to the “Black Lives Matter” movement. In 2020, “Black Lives Matter” grew as a rallying cry for racial justice following George Floyd’s murder. Ye has had some contrarian opinions about the movement. Then on Oct. 7, Ye was kicked off Instagram, and quickly went to Twitter, where he was suspended, after tweeting that he planned to go “death con 3 on Jewish people.” That seemed to be a reference to the Pentagon’s Defcon alert system. Later this month, Ye went on the “Drink Champs” podcast, where he doubled down on conspiracies about Jewish people secretly controlling the world. Ye also claimed Floyd’s death was more the result of the drug Fentanyl than it was the result of police violence. Floyd’s family is reportedly suing Ye. This weekend, the outbursts seemed to inspire anti-Semitic demonstrations in Los Angeles, where members of an extremist group draped banners over a major highway in support of Ye’s conspiracy theories. “He is sharing anti-Semitic tropes about Jewish people controlling the media,” the ADL said in its petition. “These hurtful statements are based on myths surrounding Jewish greed and command of the entertainment industry.” Reed said that it would be hard for mainstream consumers to “decouple” Ye from his statements, which could spell the end of his brand prospects. “Can we get people to ‘moral decouple,’” Reed said. “And the answer in my opinion is probably, ‘No,’ because the transgressions are just too explicit. They’re just way out of line.” Gap collaboration In 2020, Gap announced an Adidas-like partnership with Ye. The deal was supposed to last 10 years and bring $1 billion to the retailer. Then, last August, Ye was filmed chastising Gap leadership over his retail vision, after they launched an apparel line, including popular hoodies and jackets. “It’s not enough. It’s not enough, and I love Gap,” Ye said in the video, which circulated online. “You’d have to really give me the position to ‘Ye’ and do what I’m thinking, or I’m going to have to do what I’m thinking somewhere else.” In the same video, Ye yells at Gap leadership for not using the 3 million email addresses he brought from Adidas to market to his fans from that collaboration. “I brought 3 million emails over from Adidas and we didn’t use them,” Ye tells Gap leaders. “That’s insane. That’s insane.” For people in ad tech, and those concerned with online privacy protocols, it might be considered a breach of trust to take emails from one brand to use for another campaign. It was unclear what permissions Ye and Adidas have around their customer lists. Sheryl Daija, CEO of BRIDGE, a marketing association devoted to topics like DEI, questioned why Adidas and Gap ever partnered with Ye. “Companies need to think long and hard on the impact celebrities have on their brand image, positive or negative,” Daija said in an email. “This is clearly an example of a celebrity choice that failed on every level.” Ye has parted ways with Gap, but the retailer was still selling the clothes, until today. Now, visitors to YeezyGap.com are redirected to gap.com. “In September, Gap announced ending its Yeezy Gap partnership. Our former partner's recent remarks and behavior further underscore why. We are taking immediate steps to remove Yeezy Gap product from our stores and we have shut down YeezyGap.com,” the San Francisco-based retailer announced on Tuesday. “Antisemitism, racism and hate in any form are inexcusable and not tolerated in accordance with our values,” Gap shared in its announcement. “On behalf of our customers, employees and shareholders, we are partnering with organizations that combat hate and discrimination.” On Twitter, some consumers had recently lamented receiving online offers to buy Yeezy gear. A Yeezy Gap Twitter account was still tweeting product restocking events last week. Is this @TheOnion? Absolutely unacceptable to launch @kanyewest products worldwide as he spouts vicious #antisemitism. @Gap you said you ended your relationship. pic.twitter.com/45mSg0ZXCI— Jonathan Greenblatt (@JGreenblattADL) October 21, 2022 “Is this the Onion,” Greenblatt, the ADL CEO, tweeted on Friday, after seeing one of the promotional emails from the Gap. “Absolutely unacceptable to launch Kanye West products worldwide as he spouts vicious anti-Semitism. Gap you said you ended your relationship.” It was not a good look for Gap to still sell Yeezy items, Reed said prior to the site's shutdown. “I would get rid of it as quickly as possible,” Reed said of the Yeezy Gap retail site. “If they’re trying to hedge their bets, and sort of quietly ease their way out the last bit of sales, I wouldn’t do it.” Ad Age Next: CMO Get your tickets for the Dec. 7 event in New York Register here

How Adidas and Gap were caught in Ye's brand trap

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