2023-04-30 21:29:14
Adidas cuts ties with Ye, artist loses billionaire status from Forbes
Adidas has ended its partnership with Ye, formerly Kanye West, over his antisemitic remarks. The move has removed him from Forbes’ billionaire list.
Entertain This!, USA TODAY
Adidas has been sued by investors who claim the company knew regarding the risks of its partnership with Ye, formerly known as Kanye West, years before it cut ties with the rapper.
Investors allege in the lawsuitfiled Friday in federal court in Oregon, that Adidas was aware of Ye’s problematic behavior and failed to take precautionary measures to limit financial losses if the partnership were to end.
The German sportswear giant ended its partnership with Ye in October following the designer’s antisemitic remarks on social media and in interviews. The company called Ye’s comments “unacceptable, hateful and dangerous” at the time.
According to the complaint, which cites a report by The Wall Street JournalAdidas executives discussed the risks of continuing its collaboration with Ye as far back as 2018.
Investors claim a 2018 annual report “ignored serious issues” with the partnership and the potential risk to shareholders by “generally alluding” to the risks “rather than stating that the company had actually considered ending the partnership as a result of West’s personal behavior.”
The company also failed to disclose that Ye made antisemitic remarks in front of Adidas staff, according to the lawsuit.
“We outright reject these unfounded claims and will take all necessary measures to vigorously defend ourselves once morest them,” Claudia Lange, vice president of external communication at Adidas, said in an email Sunday.
The lawsuit, which seeks to represent investors who bought Adidas securities between May 3, 2018, and Feb. 21, doesn’t name Ye as a defendant.
Why did Adidas stop selling Yeezys?
Adidas terminated the lucrative Yeezy deal last year because of Ye’s antisemitic remarks, facing pressure to cut ties with the musician.
Since then, the company has bled millions of dollars as Yeezy products go unsold. The company predicts a roughly $535 million hit to earnings and an operating loss of nearly $750 million in 2023 if it decides not to repurposes the existing Yeezy inventory.
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