Adidas shareholders have filed a class-action lawsuit against the sportswear giant over the costly failure of the company’s partnership with popular rapper Kanye West.
In a lawsuit filed Friday in U.S. District Court in Portland, the shareholders alleged that company executives knew of the dangers posed by West’s behavior years earlier but failed to take precautionary measures, NBC news reported.
“In the Employee Risk section of the Risk discussion of the 2018 Report, he praised the Company’s commitment to a fair workplace and its strategic workforce management process, known as the ‘People Strategy’, and did not discuss how it addressed extreme behavior that is common. Kanye West,” the suit read in part.
Citing a November 2022 Wall Street Journal report, the plaintiffs added that former Adidas CEO Kasper Rorsted and CFO Harm Ohlmeyer “intended to mislead” investors or “acted with reckless disregard for the truth” by keeping shareholders in the dark. maintenance about the problems between the company and the rapper.
Citing people familiar with the matter, the WSJ report revealed that the company’s CEO and senior executives in Germany discussed the risks of maintaining a relationship with the “Monster” rapper as far back as 2018, fearing it could explode at any moment. .
In 2018, West also made inflammatory statements about slavery. In an interview with TMZ, the rapper stated that the 400 years of slavery suffered by blacks in America “seems like an opportunity”.
Shareholders also accused the executives of failing to state in their annual reports that “the Company genuinely considered terminating the Partnership as a result of West’s personal conduct, or how his conduct, if made public, might affect the Company’s reputation in relation to the Company.”
The German brand eventually cut ties with Ye in October last year after a series of anti-Semitic statements he made through various media platforms last year. The company faced a lot of public pressure after the artist doubled down on his remarks, despite the initial backlash and bans on social media platforms.
The failed Yeezy collaboration cost both parties dearly, with West losing his billionaire status last year. In February, Adidas also revealed that canceling its fashion collection would cost the brand $1.3 billion in sales this year.