INTERNATIONAL - Multinational sports apparels designer Adidas has said it remained committed to the Yeezy brand created by rapper Kanye West, despite his comments describing slavery as a choice and praising US President Donald Trump.
The sportswear company said yesterday it had agreed in 2016 to expand its partnership with West, including opening new stores, after it poached the singer-turned-designer from Nike in 2013, helping the German brand recover in the US market in recent years.
However, Adidas faced a call this week from the Care2 petition site to drop the artist after an interview in which he seemed to suggest that 400 years of slavery had been a choice, and also praised Trump for doing "the impossible”.
“It is clear there are some remarks that we don’t support,” chief executive Kasper Rorsted told a conference call for journalists, but added: “We are very committed to the Yeezy brand moving forward.”
Rorsted said the partnership was very important for the brand, although it had minimal impact on sales as most Yeezy products are released in limited quantities to generate hype.
Rorsted made the comments after Adidas reported better-than-expected first-quarter net profit, as it outperformed rivals Nike and Under Armour in North America.
Adidas shares, up 13% in the last three months after it announced a big share buyback in March, were down 1percent at 8.57am, with traders expressing concern about the West partnership and slower growth in Europe.
Sales rose 21% in North America and 26% in greater China, but only 5% in western Europe, and fell 16% in Russia, where Rorsted said he saw little prospect for a recovery while sanctions continue.
Nike reported a 6% drop in sales in North America in the quarter to February 28, while Under Armour saw flat sales in the region in the first three months of the year.
Adidas said e-commerce sales growth slowed to 27%, which Rorsted said was due to fewer product launches in the quarter.
Net profit rose 17percent to 542million (R8.21billion), ahead of analysts' average forecast of 510m, as higher prices helped to offset currency headwinds and an increase in marketing spending.
Rorsted also highlighted gross margin improvements at struggling fitness brand Reebok, which saw sales return to growth in North America for the first time in years.
Unlike German rival Puma, Rorsted said he was not too concerned about the prospect of US tariffs on footwear made in China, noting that Adidas sources most of its shoes from Vietnam.