Adidas is facing a lawsuit from investors who say the company knew about the risks of its partnership with Kanye West long before it cut ties with the rapper.
The sportswear giant ended its agreement with West, also known as Ye, in October 2020 following a series of controversial remarks, including anti-Semitic comments.
The investors claim senior executives at Adidas had discussed West’s problematic behavior and the risks associated with continuing the partnership as far back as 2018.
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The complaint states Adidas overlooked West’s comment slavery “sounds like a choice”, which caused backlash at the time.
At the time, former chief executive Kasper Rorsted said: “There clearly are some comments we don’t support. Kanye has been and is a very important part of our strategy and has been a fantastic creator”.
The shareholders also claim Adidas failed to minimize its financial losses or take precautionary measures to reduce its exposure in the event that the partnership were to end, especially if demand for the shoes were to fall due to any controversy surrounding West.
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Adidas expects to lose over £1bn from cutting ties with the rapper.
It has rejected the claims, stating that they are unfounded and that the company will take all necessary measures to defend itself.
Following the end of the partnership, Adidas launched an independent investigation into reports of a “toxic environment” created by West, with staff alleging that the rapper had made “sexually disturbing references” while providing design feedback.
The lawsuit covers investors who bought Adidas stock between May 3, 2018, and 2023.
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The outcome of the legal action will be closely watched by investors, as it could have significant implications for the company’s reputation and future financial performance.
