Adidas shareholders suing brand over partnership with Kanye West

Adidas is facing a class-action lawsuit filed by its shareholders accusing the sportswear brand of not warning investors about rapper Kanye West’s “extreme behaviour” and antisemitism before their partnership ended in 2022.

The lawsuit claims that Adidas “routinely ignored” West’s behaviour, including his antisemitic remarks and public comments about slavery. The shareholders allege that senior executives “ignored serious issues” affecting the Yeezy partnership and failed to take meaningful precautionary measures to limit negative financial exposure if the partnership ended.

According to the lawsuit, in 2018, Adidas was aware of West’s behaviour and the risks it posed to the partnership. However, Adidas reportedly did not state that it had considered ending the partnership as a result of West’s personal behaviour but “generally alluded” to the risks. The lawsuit alleges that Adidas did not take any significant action to address the concerns or protect its shareholders from potential financial losses if the partnership ended.

Read Also: Two Catholic Priest Abducted By Unknown Gunmen

The lawsuit does not name West, who now goes by the name Ye. The suit covers anyone who bought an Adidas share between May 3, 2018 (when West made the slavery remark) and 2023. Adidas’ Chief Financial Officer Harm Ohlmeyer and former CEO Kasper Rørsted are named as defendants.

Adidas released a statement rejecting the claims and vowing to defend itself against them. The company ended its almost decade-long partnership with West in October 2022 after he wore a “White Lives Matter” T-shirt in public and made antisemitic comments during a podcast taping.

Adidas cited its intolerance of antisemitism and any other form of hate speech as reasons for ending the partnership and said West’s comments were “unacceptable, hateful, and dangerous.” The company reported in February that it expected to lose $1.3 billion in revenue this year due to the inability to sell West’s Yeezy clothing and shoes.

The lawsuit highlights the challenges companies face when partnering with high-profile individuals and the importance of taking swift action to address any concerning behaviour that could potentially harm the company’s reputation and financial performance.

Companies must have effective measures in place to protect their shareholders and stakeholders from reputational and financial harm caused by individuals they partner with. The lawsuit is ongoing, and the outcome is yet to be determined.