May 1, 2023

Investors sue Adidas over Kanye West deal

Kanye West

Kanye West’

By Biodun Busari

Investors have filed a lawsuit against Adidas, alleging executives had information about the problematic behaviour of Ye, formerly known as Kanye West, for years before the company ended its partnership with the rapper.

Adidas parted ways with West in October after the rapper made a series of antisemitic remarks, CBS News said.

But, in their class action suit, filed Friday, shareholders alleged the company in 2018 knew about the dangers of doing business with the music artiste and failed to take precautionary measures to limit negative exposure.

“In the Personnel Risk section of the 2018 Report’s discussion of risk, the Company extolled its commitment to having an equitable workplace, and its strategic workforce management process, known as ‘People Strategy’, while failing to discuss how it routinely ignored extreme behaviour from Kanye West,” according to the suit.

Adidas announced its partnership with Kanye West in November 2013. The first Yeezys debuted in February 2015. The shoes surged in popularity, even as the rapper came under fire in 2018 over remarks he made about slavery.

Last year, Yeezy accounted for about 10% of Adidas’ annual revenue, analysts told CBS MoneyWatch in October. In February, the company said it expects to lose $1.3 billion in sales this year because Yeezy clothes and shoes will not be available.

While former Chief Executive Officer Kasper Rorsted and Chief Financial Officer Harm Ohlmeyer are named in the suit, Ye is not named as a defendant.