Investors in Adidas, German sportswear giant, have filed a lawsuit against the company at a US court over its cancelled partnership with controversial rapper and designer, Kanye West, saying the company should have been aware he courted controversy.
The class-action lawsuit was submitted on Friday, in US District Court in Oregon, where Adidas’ US headquarters is located, and argued that executives failed to control damage linked to the tie-up.
Adidas halted its deal with the rapper, now known formally as Ye, in October after he made a series of anti-Semitic outbursts. As a result, the group ended production of the highly successful Yeezy line designed together with West.
The US lawsuit represents people who bought Adidas shares between May 3, 2018, and February 21, 2023.
The suit argued that, for years, before the partnership ended, the rapper began to accrue controversy as a result of his various statements on topics such as slavery, racial issues, and politics. In 2018, for example, West suggested that slavery had been a “choice” for enslaved people.
Adidas, however, dismissed the allegations in the litigation.
“We firmly reject these unfounded claims and will take all necessary steps to vehemently defend ourselves against them,” a company spokesman, Stefan Pursche, said.
The rapper was associated with rival sportswear company, Nike for years but broke away in 2013, lending his name to Adidas as they launched their first Yeezy shoe in 2015 — a partnership that went on to make him a billionaire.
The company began a review of its relationship with West after he appeared at a Paris fashion show last October wearing a shirt emblazoned with ‘White Lives Matter,’ a slogan created as a backlash to the Black Lives Matter movement.
Days later, he was locked out of Twitter and Instagram over anti-semitic threats.
Adidas, in March, said it was now weighing what to do with its huge inventory of West’s Yeezy products, as potentially not selling the apparel and shoes linked to West would lead to a revenue loss of 1.2 billion euros ($1.3 billion).
That would lower the company’s operating profit by an additional 500 million euros in 2023, the company said.
