A law firm has filed a class action suit against Adidas for misleading investors, saying the German sportswear brand was aware of Kanye West’s, or Ye’s, controversial and racist behavior well before the brand ended its Yeezy partnership with him in October 2022.
The suit, which was filed late last week and names Adidas former CEO Kasper Rorsted and CFO Harm Ohlmeyer as defendants, is seeking people who purchased Adidas securities between May 3, 2018 and February 21, 2023 to join the class. Rosen Law Firm, which filed the suit, is seeking lead plaintiffs to join the suit before June 27.
“We outright reject these unfounded claims and will take all necessary measures to vigorously defend ourselves against them,” Adidas told FN in a statement.
Adidas ended its Yeezy partnership with Ye in October after the rapper turned designer made repeated antisemitic comments. Before the company cut ties with Ye, it faced backlash for waiting to do so while the designer doubled down on anti-semitic rhetoric, as Balenciaga, CAA, Vogue and more big names revealed they were cutting ties with him.
According to the suit, West had exhibited problematic behavior as early as 2018, when he stated that slavery in the U.S. was a “choice” on TMZ. the suit also alleged that West made antisemitic comments in front of Adidas staff and suggested naming an album after Adolf Hitler.
“Adidas was aware of his behavior, and failed to warn investors that it was aware of that behavior, and had considered ending the partnership as a result of it,” the suit claimed. “Adidas failed to take meaningful precautionary measures to limit the financial exposure of the Partnership were to end as a result of West’s behavior.”
In November, Adidas said it was investigating claims made in an anonymous letter from staff which alleged that senior executives at the company ignored years of abusive behavior by rapper and former collaborator Kanye West. The letter, which was reported exclusively by Rolling Stone, said that multiple disturbing incidents involving West took place over almost a decade. The letter stated that senior Adidas staffers knew of West’s “problematic behavior” but “turned their moral compass off.”
In Q4, the German sportswear company’s revenues fell 1% in currency neutral terms to 5.2 billion euros, reflecting a negative impact of around 600 million euro related to the loss of the Yeezy business. Adidas indicated it might rebrand and sell existing Yeezy product to help mitigate losses.