Adidas cuts ties with Ye, artist loses Forbes billionaire status
Adidas has ended its partnership with Ye, formerly Kanye West, over his anti-Semitic remarks. The move took him off the Forbes list of billionaires.
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Adidas is being sued by investors who say the company knew about the risks of partnering with Ye, formerly known as Kanye West, years before cutting ties with the rapper.
The investors alleged in the lawsuit filed Friday in federal court in Oregon that Adidas knew about Ye’s problematic behavior and failed to take precautions to limit financial losses if the partnership was terminated.
The German sportswear giant ended its partnership with Ye in October following the designer’s anti-Semitic remarks on social media and in interviews. At the time, the company called Ye’s comments “unacceptable, hateful and dangerous.”
According to the complaint, which cites a report by The Wall Street Journal, Adidas executives discussed the risks of continuing to work with Ye as early as 2018.
Investors say the 2018 annual report “ignores serious issues” with the partnership and potential risk to shareholders, “generally hinting” at the risks, “rather than stating that the company actually considered ending the partnership as a result of the personal conduct of West’.
The company also failed to disclose that Ye made anti-Semitic remarks to Adidas staff, according to the lawsuit.
“We strongly reject these baseless allegations and will take all necessary measures to vigorously defend against them,” Claudia Lange, vice president of external communications at Adidas, said in an email on Sunday.
The suit, which seeks to represent investors who bought Adidas securities between May 3, 2018 and February 21, does not name Ye as a defendant.
Why Did Adidas Stop Selling Yeezys?
Adidas ended its lucrative Yeezy deal last year over Ye’s anti-Semitic remarks, facing pressure to cut ties with the musician.
Since then, the company has thrown away millions of dollars as Yeezy products remain unsold. The company is predicting an estimated $535 million hit to earnings and an operating loss of nearly $750 million in 2023 if it decides not to reuse existing Yeezy inventory.