Investors have filed a lawsuit against Adidas AG, alleging that the company was aware of the risks associated with its partnership with rapper Kanye West, also known as Ye, long before his anti-Semitic comments became public. In October, Adidas terminated its relationship with Ye following a series of hateful remarks.
According to the lawsuit filed in federal court in Oregon on Friday, senior executives at Adidas discussed the risks of continuing the partnership with Ye as early as 2018. The investors claim that Adidas failed to address these concerns adequately in its 2018 annual report, merely alluding to the risks without explicitly considering terminating the partnership based on West’s behavior.
The lawsuit further alleges that subsequent reports by Adidas failed to disclose West’s anti-Semitic comments, including his suggestion of naming an album after Adolf Hitler, which he made during interactions with Adidas staff. As the partnership deteriorated, Adidas shares also suffered a decline until the termination of the deal.
Adidas has yet to respond to the lawsuit or provide a comment on the matter.
Following the termination of the partnership, Adidas continued to accept shipments of Yeezy products from suppliers who were still producing them. To mitigate the financial impact of the collapsed alliance with Ye, Adidas is considering selling the remaining Yeezy products and donating the profits to charity. These products, valued at €1.2 billion ($1.3 billion), are currently in Adidas warehouses.
The lawsuit seeks to represent investors who purchased Adidas securities between May 3, 2018, and February 21. Former CEO Kasper Rorsted, who was ousted from his position, is also named as a defendant in the lawsuit.