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Adidas vs. Shareholders: Lawsuit Filed Over Company’s Response to Kanye West’s Problematic Conduct

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Adidas, the global sportswear giant, is facing a class-action lawsuit filed by investors, accusing the company of overlooking the erratic behavior of the artist known as Ye, formerly Kanye West, prior to terminating their lucrative partnership.

The lawsuit, filed last Friday, alleges that Adidas knew as early as 2018 of the potential risks associated with the controversial rapper yet failed to enact suitable precautions to mitigate the ensuing negative publicity.

The partnership with West, first announced in November 2013, resulted in the creation of the popular Yeezy line of sneakers, which first hit stores in February 2015. Despite West’s controversial comments about slavery in 2018, the sneakers continued to gain market traction.

Analysts told CBS MoneyWatch in October that last year, the Yeezy brand accounted for approximately 10% of Adidas’ annual revenue. Following the termination of the partnership after West’s series of antisemitic remarks, Adidas expects to lose $1.3 billion in sales this year due to the absence of Yeezy clothing and shoes.

The investors’ suit specifically references the 2018 Company Report, alleging a disconnection between the company’s proclaimed commitment to an equitable workplace and its management strategy, known as ‘People Strategy’, and its tolerance of West’s erratic behavior.

The suit states, “In the Personnel Risk section of the 2018 Report’s discussion of risk, the Company extolled its commitment to having an equitable workplace, and its strategic workforce management process, known as ‘People Strategy’, while failing to discuss how it routinely ignored extreme behavior from Kanye West.”

Named in the lawsuit are former CEO Kasper Rorsted and CFO Harm Ohlmeyer, both of whom allegedly were aware of the potential hazards of partnering with West. Notably, West himself is not named as a defendant in the lawsuit.

Adidas parted ways with West in October, following the rapper’s series of antisemitic remarks, according to CBS News on Sunday, April 30, 2023.

The company, shareholders, and West have yet to comment on the suit.

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