A group of investors has recently filed a lawsuit against Adidas, claiming that the company’s executives were aware of the problematic behavior of Ye, formerly known as Kanye West, for several years before ending their partnership with the rapper. According to CBS News, Adidas ended its collaboration with West in October after the rapper made a series of antisemitic remarks.
However, in their class action lawsuit filed on Friday, shareholders alleged that the company knew about the risks of working with the music artist as early as 2018 and failed to take necessary measures to mitigate negative publicity.
Specifically, the lawsuit claims that the company’s 2018 report’s discussion of risk in the “Personnel Risk” section emphasized its commitment to having an equitable workplace and a strategic workforce management process called “People Strategy,” but failed to acknowledge how the company overlooked West’s extreme behavior.
Adidas first announced its partnership with Kanye West in November 2013, with the launch of the first Yeezy shoes in February 2015. Despite the rapper’s controversial remarks about slavery in 2018, the Yeezy shoes continued to grow in popularity.
According to analysts who spoke with CBS MoneyWatch in October, Yeezy accounted for about 10% of Adidas’ annual revenue last year. However, the company has forecasted a $1.3 billion sales loss this year as a result of the absence of Yeezy clothes and shoes.
Although the lawsuit names former CEO Kasper Rorsted and CFO Harm Ohlmeyer as defendants, Kanye West is not implicated in the lawsuit.
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