Adidas shareholders have filed a class-action lawsuit against the sportswear brand, claiming it knew about Kanye West’s problematic behavior years before ending their partnership over his anti-Semitic comments.
Shareholders also allege that Adidas failed to mitigate its financial losses or take precautionary measures to reduce its exposure, after the designer and rapper’s offensive behavior and comments caused him and his Yeezy brand to be dropped by Adidas, which It led to a sharp decline in the company’s inventory.
“We categorically reject these baseless allegations,” Adidas said in a statement in response to the lawsuit, adding that the company would “take all necessary measures to vigorously defend ourselves against it.”
West, known as Ye, is not a party to the lawsuit, which is being filed in the United States.
Under the Yeezy brand, Ye designed highly successful sportswear and sneakers for Adidas.
But the sportswear giant ended its collaboration with Yi last October after Praise Adolf Hitler and Nazis in Interview on Infowars, a show by right-wing conspiracy theorist Alex Jones; models dressed at Paris Fashion Week in clothes bearing the slogan “White Lives Matter,” which the Anti-Defamation League classifies as white supremacist; He made anti-Semitic remarks which led to the suspension of his Instagram and Twitter accounts.
Adidas has revealed that it could lose up to €1.2 billion (US$1.3 billion) on unsold Yeezy products if it decides not to sell them and warned that it could report its first loss in three decades.
When the company ended its relationship with Ye in October, it said: “Adidas does not tolerate anti-Semitism and any other kind of hate speech.
“Ye’s recent comments and actions are unacceptable, hateful, and dangerous, and violate the company’s values ​​of diversity, inclusion, mutual respect, and fairness.”
But the lawsuit alleges that Adidas knew about Ye’s behavior prior to that time, alleging that former CEO Kasper Rorsted discussed her as well as other senior executives.
When Yee said in a 2018 interview that slavery “seems like an option”, Rorsted said, “There are clearly some comments that we don’t support. Kanye has been and continues to be a very important part of our strategy and he’s been an amazing creator.”
In the wake of this comment, the suit claims that Adidas “ignored the risk of oversupply of Yeezy-branded shoes should the partnership end abruptly and, in particular, if demand for the shoes fell due to any controversy over West.”
The class action includes anyone who bought Adidas stock between May 3, 2018 — the day West made the comment about slavery — through 2023.
After Adidas ended the partnership last October, he The Wall Street Journal published the details from an alleged meeting in 2018 during which employees raised concerns about Yi’s behavior to senior executives, who allegedly advised employees on how to avoid interacting with him as well as the brand possibly severing ties with him.
Adidas has since launched an independent investigation into reports that Ye created a “toxic environment” at the company, after employees wrote an open letter alleging Ye showed them explicit photos of himself and ex-wife Kim Kardashian, yelled at female workers, and made “disturbing references.” sexually when providing design feedback. In the letter, the staff claimed that the bosses were aware of Yee’s “problematic behaviour” but had “turned off their moral compass”.
In response to the allegations, Adidas said it took them “very seriously”. Yi did not respond to requests for comment.
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