Adidas investors who lost heavily to the sportswear giant’s partnership with Kanye West are suing the brand over claims they “routinely ignore” the rapper’s outbursts of anger and anti-Semitism.
The class action lawsuit claims Adidas, who teamed up with West for the wildly successful Yeezy line, failed to end the partnership even after comments that included his tweet: “I’m going to die con 3 on JEWS.”
West’s decision to wear a ‘White Lives Matter’ jersey and his controversial statement that slavery was a ‘choice’ were also cited as allegedly negligent actions by Adidas.
The lawsuit says the company and its executives “failed to warn investors” that they were aware of West’s behavior and even “considered terminating the partnership because of it”. Former CEO Kasper Rørsted and Chief Financial Officer Harm Ohlmeyer are also named as defendants.
Adidas has acknowledged in its own filings that the impact of the Yeezy deal could lower the company’s revenue by about $1.29 billion and cut operating profit by about $550 million.
The partnership between Adidas and Kanye West for the rapper’s Yeezy line is one of the most lucrative in the brand’s history – but now the company is facing hundreds of millions of dollars in losses after dropping West over comments about Jews and slavery.
Former CEO Kasper Rørsted and Adidas Chief Financial Officer Harm Ohlmeyer were singled out in the lawsuit, which claims Adidas made ‘false and/or misleading’ statements to investors
Lawyers filed the lawsuit in Oregon Friday on behalf of HRSA-ILA Funds, which manages investments for the International Longshoremen’s Association.
HSLA purchased about $353,000 worth of Adidas shares during the first three months of 2022. They sold the shares in December 2022 – a few weeks after Adidas fell to West – for a loss of $175,000.
The lawsuit cites Adidas’ claims in 2016, three years after the partnership with West, it had “the most significant partnership ever made between a non-athlete and an athletics brand”.
Yeezy sales surpassed $1 billion in 2019 and West has “amassed a significant fortune” through the tie-up. The lawsuits say West licensed his Yeezy trademark to Adidas in exchange for a 15% cut on sales.
Adidas stock 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.
Investors in the lawsuit claim that they “suffered significant loss and damage” due to Adidas’ “wrong acts and omissions, and a sharp decline in market value”.
Adidas said: “We immediately reject these baseless claims and will take all necessary measures to vigorously defend ourselves against them.”
Source: | This article originally belonged to Dailymail.co.uk
