The wrath of Kanye threatens sneaker maker Adidas

This is Bloomberg Opinion Today, a purloined pirouette through Bloomberg Opinion’s opinions. Sign up here. Kanye West is dumping Gap and Adi [Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, a purloined pirouette through Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - Kanye West is [dumping Gap and Adidas](. - The wheels are coming off [the bicycle boom](. - Technology, not capital, is [the real issue in banking](. - The [ice age for bonds]( is over. Yeezy Come, Yeezy Go In my childhood, Adidas sneakers were almost a rite of passage. The more affluent teenage members of my Liverpool community started with a pair of Adidas Kick, before graduating to Mamba, then Bamba, then Samba. Only in our late teens did the uniform expand to incorporate the diversity offered by SL76s, Stan Smiths, Gazelles and, for the true cognoscenti (typically those with older brothers who’d followed the local soccer team on its European jaunts and returned bearing Continental exotica), top-of-the-line models such as Forest Hills and Jeans. Nike Inc.’s offerings never, ever got a look in. My casual footwear collection remains exclusively dedicated to the German brand. But Adidas AG faces a problem, argues Andrea Felsted. Its decade-long deal with Kanye West and his Yeezy fashion label [is being unwound by the musician](, who is also ditching his partnership with Gap Inc. as he goes solo. While that’s a problem for Gap, “it would be an even bigger headache for Adidas,” Andrea argues. Yeezy generates annual sales worth as much as 1.5 billion euros, or about 8% of Adidas revenue. Andrea suggests that trying to replace the rapper with another cultural icon would be a mistake; instead, it should follow the playbook it adopted by teaming up with Prada SpA in 2019, and compete with Nike in trying to reinvent itself as a luxury brand. Adidas Chief Executive Officer Kasper Rorsted is due to step down next year. Hiring a replacement with a proven track record of developing successful products and building brands will be key to reviving the German company’s fortunes. “Retail is detail, so the old adage goes,” says Andrea. “Betting on bling is wise.” Two Wheels Good, Four Wheels Bad In recent years, consumers keen to avoid their potentially Covid-virulent fellow travelers on public transport have embarked on a two-wheel buying spree. But bicycle makers are warning that profits are under threat, suggesting a drop in demand and a glut of inventory are becoming a problem. [“Is air leaking out of the bicycle boom?”]( asks Chris Bryant. A normalization of demand, with about 4.5 million more bikes sold in Europe in the past two years compared with pre-pandemic volumes, was inevitable, Chris argues. Backyard grill makers and exercise equipment companies have also suffered from the so-called “bullwhip effect,” with stretched manufacturing times and overly rosy assessments of customer appetite creating too much inventory. The cost-of-living crisis is also denting demand. But it’s not all gloom. City planners are increasingly making space for cyclists, with dedicated bike lanes encouraging more pedal-pushing. And the market for motor-assisted e-bikes, which sell for a lot more than their traditional counterparts, is booming. “For those of us who wish cities weren’t so beholden to car owners — battery-powered or otherwise — this is great news,” Chris writes. Will Butler-Adams, chief executive officer of UK folding bike company Brompton Bicycle Ltd., remains optimistic. “The urban cycling boom isn’t a blip,” he told Chris. “We are on a journey of removing cars from cities.”  Machines, Not Money US politicians had the opportunity to cross-examine the CEOs of seven US megabanks this week. When they could drag themselves away from political posturing, their questions focused on blocking mergers and higher capital charges. But that misses the point: The future of the banking industry is being [shaped by technology](, argues Paul J. Davies. JPMorgan Chase & Co. and Bank of America Corp. have been investing big time in digital technology, and have won a disproportionate share of the growth in deposits as a result. JPMorgan’s national market share, for example, increased to 10.3% from 8.9% between 2017 and 2021. “The biggest banks, with the greatest profits, are already investing vastly more in faster, cheaper, easier-to-use digital apps than smaller banks can afford,” Paul argues. “Technology is helping big banks gain market share and is more likely to drive consolidation in the years ahead than regional bank mergers.” Telltale Charts [The downward trend in 10-year Treasury yields]( that has persisted ever since Paul Volcker’s Federal Reserve slew inflation is over, argues John Authers. With the UK government shaking the magic money tree very, very hard to fund a plethora of tax cuts, traders are ramping up their expectations for how high the Bank of England will have to raise official interest rates to cope with the inflationary ramifications of the largesse, [according to yours truly](. Further Reading (and Listening) Financial markets have faced a stream of hawkish rhetoric this week. — A podcast featuring Admiral James Stavridis, Jonathan Levin and John Authers. Get ready for the [Great British fire sale](. — Chris Hughes Free breakfasts can’t compensate for [the pain of commuting](. — Sarah Green Carmichael Why [Italy’s far-right virus]( threatens Europe’s body politic. — Rachel Sanderson Now the UK has to wrestle with [India’s radicalized demons](, too. — Mihir Sharma [FedEx’s pricing power]( isn’t working and it won’t last. — Thomas Black Biden should amplify the voices of [Iran’s brave protesters](. — Bobby Ghosh [The European “way of life”]( isn’t looking too sweet. — Lionel Laurent ICYMI China’s most locked-down city shows [the perils of endless Covid Zero](. Hong Kong [ends hotel quarantine]( in biggest Covid shift to date. Banks [dust off lockdown plans](to beat possible London power blackouts this winter. Kickers This Italian restaurant is so exclusive [there’s only one table](. Look out, Guitar Hero — [Trombone Champ is taking over the Internet](. A doghouse from Hermes for your Very Good Boy. [A snip at $1,875](. A medal awarded for bravery to [an SAS dog that parachuted behind enemy lines](in World War II is expected to fetch £30,000 at auction. (h/t Andrea Felsted for previous two entries.) Here are the top tricks from neurologists on how to take [brain breaks]( and achieve an ideal workday. Notes:  Please send stolen highway signs and feedback to Mark Gilbert at magilbert@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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