The decision comes after Adidas put the tie-up, which has produced several hot-selling Yeezy branded sneakers, under review earlier this month following its efforts to privately resolve the issue.
“Adidas does not tolerate antisemitism and any other sort of hate speech,” the German company said.
“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,” it said, referring to the rapper by his legal name.
A lawyer representing Ye did not respond to a request for comment.
Ending the partnership and the 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 euros ($248.90 million)” on Adidas’ net income this year, the company said.
Ye has courted controversy in recent months by publicly ending major corporate tie-ups and due to outbursts on social media against other celebrities. His Twitter and Instagram accounts were restricted, with the social media platforms removing some of his online posts that users condemned as antisemitic.
In now-deleted Instagram posts from earlier this year, the multiple Grammy award-winning artist accused Adidas and U.S. apparel retailer Gap Inc of failing to build contractually promised permanent stores for products from his Yeezy fashion line.
He also accused Adidas of stealing his designs for its own products.
On Tuesday, Gap, which had ended its partnership with Ye in September, said it was taking immediate steps to remove Yeezy Gap products from its stores and that it had shut down YeezyGap.com.
“Antisemitism, racism and hate in any form are inexcusable and not tolerated in accordance with our values,” Gap said in a statement. The company was selling existing Yeezy Gap stocks until the sell-off period.
European fashion house Balenciaga has also cut ties with Ye, according to media reports.
“The saga of Ye … underlines the importance of vetting celebrities thoroughly and avoiding those who are overly controversial or unstable,” said Neil Saunders, managing director of GlobalData.
Adidas poached Ye from rival Nike Inc in 2013 and agreed to a new long-term partnership in 2016 in what the company then called “the most significant partnership created between a non-athlete and a sports brand.”
The tie-up helped the German brand close the gap with Nike in the U.S. market.
Yeezy sneakers, which cost between $200 and $700, generate about 1.5 billion euros in annual sales for Adidas, making up a little over 7% of its total revenue, according to estimates from Telsey Advisory Group.
Shares in Adidas, which cut its full-year forecast last week, closed down 3.2%. The group said it would provide more information as part of its upcoming Q3 earnings announcement on Nov. 9.
