Adidas sued by investors for 'ignoring' Kanye West's anti-Semitism

Adidas sued by investors for 'ignoring' Kanye West's anti-Semitism

May 1, 2023

Adidas investors sue sports retail giant for ‘routinely ignoring’ Kanye West’s ‘extreme behavior’ including his 2018 claim slavery was a ‘choice’ – after they lost $180k during fallout from rapper

  • Adidas investors who lost big over the doomed partnership with Kanye West claim the brand ‘ignored’ the rapper’s erratic and anti-Semitic outbursts
  • A class action lawsuit says bosses failed to drop West even after comments which included his tweet: ‘I’m going death con 3 on JEWISH PEOPLE.’
  • The suit, filed in Oregon, is led by an investment group which lost nearly $180k

Adidas investors who lost big over the sportswear giant’s doomed partnership with Kanye West are suing the brand over claims it ‘routinely ignored’ the rapper’s erratic outbursts and anti-Semitism.

A class action lawsuit claims Adidas, which teamed with West for his hugely successful Yeezy line, failed end the partnership even after comments which included his tweet: ‘I’m going death con 3 on JEWISH PEOPLE.’

West’s decision to wear a ‘White Lives Matter’ t-shirt and controversial remarks that slavery was a ‘choice’ are also cited as actions which Adidas allegedly turned a blind eye towards.

The suit says the company and its executives ‘failed to warn investors’ that it was aware of West’s behavior and had even ‘considered ending the partnership because of it’. Former CEO Kasper Rørsted and Chief Financial Officer Harm Ohlmeyer are also named as defendants.

Adidas has admitted in its own filings that fallout from the Yeezy deal could lower company revenue by around $1.29 billion and cut operating profits by about $550 million.

The partnership between Adidas and Kanye West for the rapper’s Yeezy line was one of the most lucrative in the brand’s history – but now the company faces losses of hundreds of millions of dollars after it dropped West over comments about Jewish people and slavery

Former CEO Kasper Rørsted and Adidas Chief Financial Officer Harm Ohlmeyer are singled out in the suit, which claims Adidas made ‘false and/or misleading’ statements to investors

Lawyers filed the suit in Oregon on Friday on behalf of HRSA-ILA Funds, which manages investments for the International Longshoremen’s Association.

The HSLA bought shares worth about $353,000 in Adidas through the first three months of 2022. They sold the shares in December 2022 – weeks after Adidas dropped West – at a loss of roughly $175,000.

The lawsuit cites Adidas’ claim in 2016, three years into the partnership with West, it had ‘the most significant partnership ever created between a non-athlete and an athletic brand’.

Yeezy sales surpassed $1 billion in 2019 and West ‘accumulated significant wealth’ through the tie up. The lawsuits says that West licensed his trademark of Yeezy to Adidas in exchange for a 15% cut of sales.

Adidas stocked plunged from a high of around $189 in July 2021 to a low of around $51 in October 2021, during the height of the West scandal. The brand cut ties with the rapper on October 25 2022.

Investors in the suit claim they ‘suffered significant losses and damages’ because of Adidas’ ‘wrongful acts and omissions, and the precipitous decline in the market value’.

The suit presents a string of examples of West’s controversial behavior and comments.

In 2018, he said: ‘When you hear about slavery for 400 years. For 400 years?! That sounds like a choice.’

He wore a t-shirt at Paris Fashion Week in October 2022 with the slogan ‘White Lives Matter’. 

Days later, West posted a tweet which included the comment: ‘I’m a bit sleepy tonight but when I wake up I’m going death con 3 on JEWISH PEOPLE. The funny thing is I actually can’t be Anti Semitic because black people are actually Jew’ 

The lawsuit cites West’s decision to where a ‘White Lives Matter’ t-shirt at Paris Fashion Week in October 2022 as an example of his erratic behavior

The suit also references West’s tweet which said ‘I’m going death con 3 on JEWISH PEOPLE’

Kanye West attends the Givenchy Womenswear Spring/Summer 2023 show as part of Paris Fashion Week on October 02, 2022

Amid a furious international backlash, West doubled down on the remarks and claimed Adidas was powerless to drop him. 

In comments which are referenced in the suit, West said on October 21: ‘The thing about it being Adidas is like, I can literally say anti-Semitic s*** and they cannot drop me. I can say anti-Semitic things, and Adidas can’t drop me. Now what? Now what?’

Lawyers also point to comments and statements made by Adidas and its executives throughout the partnership which allegedly show it ‘stuck by’ West.

Following West’s slavery remarks, Rørsted said ‘there are clearly 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 company allegedly ‘ignored the risks of oversupply of Yeezy branded shoes in the event that the partnership were to suddenly end. Adidas failed to ‘mention risks relating to the partnership’ in several annual reports, the lawsuit claims. 

The suit also cites media reports that said Adidas executives discussed risks linked to its West deal as early as 2018. 

Adidas said: ‘We outright reject these unfounded claims and will take all necessary measures to vigorously defend ourselves against them.’ 

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