Sportswear giant Adidas has been sued by investors over its now-defunct partnership with American designer and rapper Kanye West’s Yeezy brand, according to reports.
West is not a party to the lawsuit, which was filed over allegations that the Herzogenaurach-based company knew of its problematic behavior years before the partnership ended. Also, the company is said to have failed to limit financial losses and take precautions to minimize risk.
Adidas inked a deal with West, now known as Ye, in 2013, who designed a line of sneakers under the Yeezy brand, which were very successful. However, in October last year, the company ended its partnership with West, arguing that he had made offensive statements on social media, including posting anti-Semitism.
In March, Adidas reported a loss for the fourth quarter, mainly due to costs related to the termination of the Yeezy partnership, compared to a profit a year earlier. The company also expects that unsold Yeezy products will reduce sales by approximately €1.2 billion and operating profit by approximately €500 million in 2023.
Adidas denies allegations
The lawsuit alleges that the company knew of West’s past questionable behavior and reported an alleged meeting in 2018 where Adidas management reportedly discussed West’s behavior. Meanwhile, Adidas responded to the allegations and the lawsuit, stating that it clearly denies these baseless allegations and will take all necessary measures to vigorously defend itself against them.
In terminating the Yeezy contract last year, the company said it did not tolerate anti-Semitism or any other form of hate speech, and that Ye’s statements and actions at the time were unacceptable, hateful, dangerous and against the company’s values of diversity and inclusion , mutual respect and fairness. Adidas also launched an investigation after reports that West created a toxic environment at the company. Adidas then said the company is continuing to explore options for using its unsold Yeezy inventory.
Following his controversial remarks, Ye was forced to cancel a number of scheduled concerts and alongside Adidas also lost more than $1 billion in net worth and lucrative brand partnerships such as with Gap, fashion brand Balenciaga and his bank JP Morgan. His social media activities have also been blocked. (dpa)
This post has been translated from English.