Shareholders of Adidas have filed a class action against the giant sportswear brand over the costly failure of the company’s partnership with popular rapper, Kanye West.
In the suit filed on Friday at a Portland U.S. District Court, the shareholders alleged that the company’s executives were aware of the risks posed by West’s behaviour years before the eventual fall-out, but took no precautionary measures, NBC news reports.
“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 behaviour from Kanye West,” the suit read in part.
Referencing a November 2022 Wall Street Journal report, The plaintiffs further stated that Adidas’ former chief executive officer, Kasper Rorsted, and chief financial officer, Harm Ohlmeyer, either “intended to deceive” investors or “acted with reckless disregard for the truth” by keeping shareholders in the dark regarding issues between the company and the rapper.
Quoting people familiar with the matter, the WSJ report revealed that the company’s chief executive and senior officers in Germany discussed as far back as 2018, the risks of maintaining a relationship with the ‘Monster’ rapper, which they feared could blow up at any moment.
Back in 2018, West had also made incendiary statements regarding slavery. During an interview with TMZ, the rapper stated that 400 years of slavery endured by black people in America “sounds like a choice”.
Shareholders further blamed the executives for not specifically stating in annual reports “that the Company had actually considered ending the Partnership as a result of West’s personal behaviour, or how the Company’s reputation might be affected if his behaviour, as it related to the Company, were to become public.”
The German brand finally cut ties with Ye in October last year following a series of anti-semitic statements he made via various media platforms last year. The company came under intense pressure from the public after the artiste doubled down on his remarks despite initial backlash and bans from social media platforms.
The failed Yeezy partnership cost both parties a great deal, as West lost his billionaire status last year. In February, Adidas also revealed that the discontinuation of the fashion collection would cost the brand $1.3 billion in sales this year.
