• December 1, 2022

Disappointing Nowcasts For Upcoming Inflation Highlight Fed’s Concerns

U.S. Federal Reserve Chair Jerome Powell indicated that rate hikes may be ending in early 2023, but he still worries about inflation. Though we’ve seen encouraging inflation data for the month …

Student Loan Forgiveness To Remain Blocked, Says Supreme Court, As Justices Prepare To Consider Arguments

The Supreme Court on Thursday allowed a nationwide injunction blocking President Biden’s signature student loan forgiveness program to remain in place, while signalling that it will consider legal arguments regarding the …

CFDA Turns 60 With Sandbox Metaverse Exhibit, Bored Ape NFT Dress & More

To celebrate its sixtieth anniversary, The Council of Fashion Designers of America is making its metaverse debut with an exhibition in The Sandbox alongside a collection of commemorative NFTs. The seven …

After a delay that many think took too long, Adidas announced Tuesday that it’s breaking all ties with Kanye West, who now goes by Ye, for making antisemitic comments.

The move by Adidas, which drastically cuts Ye’s net worth, follows similar actions by Balenciaga, Vogue, J.P. Morgan and Creative Artists Agency. Instagram and Twitter had earlier exiled the rapper and fashion designer from their platforms.

Though Ye has remained largely defiant and indicated he’ll press ahead with his ventures on his own, Yeezy’s future business prospects could be damaged and his former partners like Adidas wounded.

Adidas’ delay was particularly troubling since the company was founded by German brothers with ties to the Nazi party. The Anti-Defamation League CEO Jonathan Greenblatt called for Adidas to “run away from hate” and warned, “Your silence is a danger to Jews.” And a Change.org petition calling out Adidas collected nearly 180,000 signatures.

Adidas stock was also held to account, dropping nearly 20% from around $115 last Thursday to about $96 on Tuesday. Ye and Adidas will feel the financial pain. Forbes estimates their Yeezy partnership is worth $1.5 billion to Ye and the company expects to take a $250 million hit on its net income in 2022.

Undoubtedly, people will soon forget Adidas’ slow response, and we agree brands are responsible for taking swift and decisive action when celebrity partners go off the rails.

But people won’t soon forget Ye, most especially his loyal following, who aren’t likely to abandon him the way brands have. It could come back to bite them in the end.

Brands Should See Bad News Coming

Brands should assume that talent “will go off script or say something less than perfect,” the influencer marketing specialist Katie Stoller of Fiat Growth said. “Build it into the plan and address it with honesty and authenticity,” she advised.

Social media has made it too easy for individuals to fall into that trap, whether caught doing something unseemly on film or saying inappropriate or hateful things, as Ye did.

But some celebrities can’t seem to resist the siren call of social media, which is critical to maintaining their status.

Ye’s business partners didn’t plan well. The qualities that made him appealing to his fans and, ultimately, to his business partners have now put Adidas and others in a difficult position.

Adidas said it would review its relationship with Ye at the beginning of the month, but waited more than two weeks to act, even as pressure mounted and Ye continued to make controversial statements.

How can a company respond?

“If the brand is able to take accountability and explain why the issue doesn’t align with the brand, they can typically be cleared of the responsibility of the talent’s mess up or bad behavior,” Stoller said.

Put Some Teeth Into It

“Business is business,” said Maura Regan, the president of Licensing International, the industry’s trade association.

Letting Ye’s remarks go unpunished would effectively endorse the statements or actions. It violates the relationship of trust brands must maintain with their customers and the world at large.

“Brands have a responsibility to their stakeholders and customers to be true to who they are and what they represent,” Regan said. “It comes down to being good stewards of the brand.”

“Brands have to put teeth into their and their partners’ commitments and take a stand,” she added.

But hanging over Ye’s crash-and-burn is a question of his mental health. In 2018, he said he suffered from a “mental condition.”

Advertisement

Many fans, including my fellow Forbes contributor Shaun Harper, would like to see Ye get help.

“Ye’s self-destruction is public and painful to watch,” Harper wrote. “It’s worsening. Someone, anyone, please help before he does irreparable harm to his legacy and billionaire empire.”

More than Ye’s billions could be on the line.

Adidas said it “does not tolerate antisemitism and any other sort of hate speech,” adding that Ye’s recent comments and actions were, “unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.”

Licensing International’s Regan suggested there may also be room for compassion for a business partner who may be struggling with mental health issues.

“He needs some intervention from a business perspective, as well as a personal perspective,” Regan said.

More Than Money At Stake

Forbes estimates Ye will be bumped off its billionaire list. Characteristically, Ye punched back, “No one at Forbes knows how to count.”

The more outrageous Ye’s comments and behavior have become, the quicker public opinion has turned against him and his business loyalties have been strained. But sympathy for Ye, who has disclosed his mental health struggles, could turn sentiment back, leaving Adidas and other brands in precarious positions with his fans.

An intervention may be good for Ye’s health and business, according Shaun Crumméy, a videographer who founded the Luhv+ community aimed at creatives, entrepreneurs and young business professionals.

“Ye’s followers know he has struggles,” said Crumméy, adding it’s doubtful they would stick with Adidas without Ye. “When they cut ties with Ye, they cut ties with all the people that love Ye and love the sneaker because of Ye,” he added.

The Prospects For A Comeback

Ye has stained his reputation. But will this be the end of Yeezy?

When Ye broke-up with Gap
GPS
last month, he announced plans to open a chain of Yeezy stores and said, “No more companies standing in between me and the audience.”

His financial setback may slow him down, as well as the distraction of acquiring the social media channel Parler, but his loyal audience will be ready when he makes his comeback. Until then, the demand and valuation of Yeezy sneakers and other products in the resale market will only go up.

Ye leaves Adidas with huge shoes to fill and seriously weakened against $47 billion arch-rival Nike. Adidas brought in less than half that last year, $21 billion. Ye gave Adidas “street-cred” that walked off with him.

How the Adidas-Yeezy breakup unfolds could heighten Ye’s sense of grandiosity and potentially send him on a faster downward spiral.

Will Ye fans hold the brands who cut him accountable, not just for canceling Ye but leaving him to deal with his mental health struggles without their support?

We are living in strange times. From a public opinion perspective, Ye’s public cancelation could become a tipping point that tests the authenticity of corporate commitments to diversity, equity and inclusion on a number of competing fronts.

The latest controversy makes his Grammy award-winning song “Jesus Walks” almost prophetic:

“God show me the way because the Devil’s trying to break me down. The only thing that I pray is that my feet don’t fail me now.”

Advertisement

Leave a Reply

Your email address will not be published.