Adidas Shareholders File Class Action Lawsuit Against Adidas and Yeezy Partnership
Adidas shareholders have filed a class action lawsuit against the company, accusing senior executives of failing to do more in warning investors about losses that should have been anticipated due to their partnership with rapper and global figure Kanye West, who now simply goes by Ye.
The lawsuit, which was filed last Friday in federal court, alleges that the globally recognized athletic company “routinely ignored” Ye’s erratic behavior which has at times been called “anti-semitic” and “extreme.” As a public figure, the rapper is no stranger to controversy and has on many occasions been questioned about his controversial remarks on topics from politics to fashion and everything in between.
The specific controversy that has concerned shareholders in this current lawsuit dates back to 2018 when in a TMZ interview Ye remarked, “When you hear about slavery for 400 years … For 400 years? That sounds like a choice.” The shareholders accuse Adidas of “ignoring serious issues” regarding Ye’s views on slavery and failing to take the necessary actions to protect investors.
The company eventually ended its ties with the rapper after he wore a “White Lives Matter” T-shirt in public in what many have described as another publicity stunt carefully crafted by the rapper. The Anti-Defamation League publicly condemned the move, explaining that the phrase is categorized as a hate slogan because it was used by white supremacist groups including the Klu Klux Klan.
Days after wearing the t-shirt, Ye publicly defended his actions on a podcast explaining “I can say antisemitic s*** and Adidas cannot drop me.” The athletic brand would go on to end its partnership with the rapper, explaining that the company “does not tolerate antisemitism and any other sort of hate speech,” and that his comments were “unacceptable, hateful and dangerous” and a violation of the company's diversity and inclusion values as well as its values regarding mutual respect and fairness.
After dropping the rapper from the company, Adidas pulled all of its Yeezy merchandise off of the shelves, including the widely popular Yeezy shoes and clothing. Subsequently, the company announced that it was expected to lose $1.3 billion in revenue because of the unsold merchandise.
The shareholders accuse Adidas of knowingly continuing the contract with Yeezy even after being aware of his recklessness and the potential financial impact it could have on the brand.
In addition to knowing the ramifications the rapper could bring to the company, the lawsuit accuses its senior executives of failing “to take meaningful precautionary measures to limit negative financial exposure.”
While the lawsuit targets the company's dealings with the rapper, it does not name him. Instead, the defendants include the company’s Chief Financial Officer Harm Ohlmeyer and former CEO Kasper Rørsted.
In a comment to CNN, the company vehemently denies the allegations. “We outright reject these unfounded claims and will take all necessary measures to vigorously defend ourselves against them,” shared a company spokesperson.
The lawsuit is seeking to cover anyone who bought Adidas stock from May 3, 2018, through February 21, 2023.
