An employee carries shoe boxes inside an Adidas AG Originals store in Berlin, Germany. (Photographer: Krisztian Bocsi/Bloomberg)

Adidas CEO Says `We Don't Support' Kanye West Slavery Remark

(Bloomberg) -- Adidas AG Chief Executive Officer Kasper Rorsted distanced himself from comments about slavery by Kanye West but said the company has not discussed dropping the rapper as a designer.

“There clearly are some comments we don’t support,” Rorsted said on a call. The company plans to talk with West about the matter, he said in an interview with Bloomberg TV after the company reported better-than-expected first-quarter earnings but said its sales were hit by the strength of the euro. The shares fell as much as 6.3 percent in Frankfurt.

West is very important to the German sportswear maker’s strategy, the CEO said in the interview after the company reported quarterly sales, highlighting the tricky balance companies have to strike when their celebrity brand ambassadors veer off the script.

The performer sparked outrage on social media with his comments on slavery in the U.S., in an interview with TMZ this week. “When you hear about slavery for 400 years -- 400 years? That sounds like a choice,” West said.

The artist designs the top-of-the-line Yeezy models that Adidas only offers in limited runs, often raffling them off or selling them only at specific stores. Rorsted said Yeezy provides a limited financial contribution but is important for “brand heat.”

That strategy pushes brand desirability and helped Adidas steal market share from larger rival Nike Inc. Adidas last year overtook Nike’s Jordan as the No. 2 brand in U.S. sports footwear, behind the U.S. company’s flagship label, according to NPD analyst Matt Powell.

The German company’s affiliation with West reflects a shift in sports companies’ marketing to social media and away from television and print advertisements, as they tap celebrities and musicians in addition to top athletes to reach younger consumers.

In its financial update, Adidas said first-quarter sales rose 10 percent at constant exchange rates, but the strong euro limited gains in local-currency terms to 1.9 percent.

Adidas’s reputation in the U.S. has already been bruised by an investigation into allegations that one of its former executives helped to facilitate illicit payments to basketball players to steer them to universities partnering with the brand.

©2018 Bloomberg L.P.