Last week, the fashion industry was involved in new legal spats, labor strikes, worker protections and debates. In this edition of the Weekend Briefing, I dive into a few of the big stories from the week around these legal and business issues. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes, and the Glossy Beauty Podcast for interviews from the beauty industry. –Danny Parisi, sr. fashion reporter
Adidas sues Kanye West over misappropriated Yeezy funds
The conflict between Kanye West and his former employer Adidas is still ongoing. Last week, it came out that Adidas is currently suing West for allegedly mishandling $100 million worth of marketing funds. Adidas alleges that the money was deposited into two Yeezy accounts to pay for advertising costs, but that the money was used for other purposes.
While the exact purposes the money was originally designated for and eventually put toward were redacted in the official court documents, West has spoken in the past about using Yeezy’s ad budget for other purposes. In a 2020 podcast, he said Yeezys were selling themselves. So, “instead of paying for ads, I invested it in the church,” he said, referring to his Sunday Service tour.
It’s the latest in a slew of stories that have come out in the last year about the dysfunctional relationship between West and Adidas. A story in Rolling Stone in November shed more light on the strange dynamic within Yeezy under West’s leadership, including the sharing of pornography to employees. While Yeezy made Adidas big money, to the tune of a billion dollars a year, it’s clear in hindsight that West’s unpredictable personality ended up not being worth the headache.
UPS worker strike still possible, negotiations to continue
UPS is returning to the bargaining table with its workers, in the hopes of avoiding a potential strike slated for the beginning of August. The International Brotherhood of Teamsters, which represents the 340,000 UPS employees who are asking for better pay and benefits, said that UPS reached out with an offer to resume negotiations after talks broke down earlier this month.
A strike at UPS would have a ripple effect beyond just the delivery company itself. UPS handles 20 million packages a day, including those sent by a large number of fashion and beauty brands. One estimate said a 10-day strike would disrupt $7 billion worth of deliveries. But as of now, the strike remains unlikely, especially given UPS’s willingness to negotiate. That’s a sharp contrast to the progress being made on these negotiations with the ongoing strike of the Writers’ Guild of America and the Screen Actors’ Guild – American Federation of Television and Radio Artists, both of which are negotiating with the Alliance of Motion Picture and Television Producers. The AMPTP has stonewalled both groups and positive progress has yet to be made on those discussions.
Gap signs on to the international Pakistan Accord
Speaking of advocating for workers, Gap became one of the first major American companies to sign on with the Pakistan Accord. The Accord is an agreement struck in Bangladesh late last year in response to disasters like the deadly Rana Plaza factory collapse in Pakistan. The binding agreement sets rules around the safety and regulation of the factories where much of the world’s apparel is made, but it so far has struggled to gain support from large American companies, which benefit from these factories.
Gap is among the first, agreeing on Thursday to abide by the Accord’s binding rules. International Accord, the organization that created the Pakistan Accord, is hoping that Gap’s decision will spur other major American companies like Levi’s, Target and Urban Outfitters to sign up, as well.
UK Parliament to debate ending the ‘tourist tax’
A date has been set in September for when the U.K. will debate ending the tourist tax, a higher tax on international shoppers. British retailers say the tax hurts the country’s economy and discourages shopping among the lucrative international traveler demographic. Rather than London’s high-end shops, retailers say those shoppers are buying luxury goods from Paris.
The British government originally estimated that dropping the tax would ultimately cost the country around $2.5 billion, while a report commissioned by the Association of International Retail claimed losing the tax would bring in an extra $449 million in additional revenue per year.
Many luxury brands have already made their feelings on the tax known. For its part, British brand Mulberry closed its Bond Street store in February, citing a lack of foot traffic.
The debate does not necessarily mean the tax will be dropped, only that it’s up for debate. Whether the U.K. will forego higher tax revenue in exchange for the potential of more international travelers will be decided later this year.