Source: Jonathan Leibson / Getty
It’s been a minute since adidas publicly severed ties with Kanye West over his antisemitic outbursts, but now the three-striped brand is being taken to court by investors who feel they waited too long to make the business decision.
Bloomberg is reporting that investors have filed a lawsuit against Adidas claiming that the German sportswear conglomerate knew the risks of partnering with the likes of Kanye West, but rolled the dice anyway and crapped out when it was all said and done. Apparently the higher ups at Adidas did indeed discuss the potential hazard that Kanye West presented back in 2018, but decided to continue their partnership with the controversial artist. That did not end well for anyone.
In a 2018 annual report, released in March of the following year, Adidas ignored serious issues of partnering with Ye – and the risk to shareholders – by “generally alluding” to the risks “rather than stating that the company had actually considered ending the partnership as a result of West’s personal behavior,” according to the complaint.
Reports in subsequent years failed to disclose that West made anti-Semetic comments to Adidas staff, at one point suggesting that he might name an album after Adolf Hitler, according to the complaint. As the relationship with Ye eroded, so did Adidas shares, until the deal was terminated, according to the filing.
To make matters worse for Adidas, even after they cut ties with Kanye West, the company continued to accept shipments of Yeezy products from suppliers who were still producing it. Ultimately Adidas ended up with $1.3 billion in Yeezy merchandise that they now plan on selling off and giving the money to charity.
The lawsuit, which seeks to representing investors who bought Adidas securities between May 3, 2018 and Feb. 21, also names ousted former CEO Kasper Rorsted as a defendant.
The case is HRSA-ILA Funds v. Adidas, 23-cv-629, US District Court for the District of Oregon.
2023 is looking to be a struggle year for Adidas given everything that Kanye has wrought on the company.
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