Kanye West’s Actions Still Haunting Adidas As Investors Claim Negligence

Investors Take Stand Against Adidas For Failure To Notify Of Kanye West’s Potential Risk

Adidas, the multinational sportswear and accessory corporation, is being sued by its investors. In the class action lawsuit, the investors claim that the company was aware of the potential risk Kanye West, now Ye, posed to the company.

According to the investors, despite the company having this knowledge, the company failed to take precautionary measures to minimize exposure as well as limit financial exposure.  In response to the lawsuit, Adidas said, “We outright reject these unfounded claims and will take all necessary measures to vigorously defend ourselves against them.”

The lawsuit comes months after Adidas terminated their collaboration with the rapper and designer in October 2022 following some antisemitic comments. While Mr. West is the reason behind the lawsuit, he is not party to it.

Consistent with the claims by the investors, Adidas stapp ad written an open letter, published by Rolling Stone magazine. According to the letter, the bosses at Adidas were aware of Mr. West’s “problematic behavior”, but “turned their moral compass off.”

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The investors also claim that the questionable behavior by the designer was discussed and brought forward by former chief executive Kasper Rorsted as well as other management.

Ye and Adidas

Ye’s collaboration with Adidas began in 2013 with the release of the “Red October” Air Yeezy 2s. With the release, he officially left Nike for a more lucrative deal with Adidas.

Under the stipulations of the deal, Mr. West retained 100% of the brand’s ownership and also gave him full creative control of the products released. Products released under the Yeezy brand include trainers, bomber jackets, sweatpants, sweatshirts, sneakers, etc.

The partnership between Kanye and Adidas was lucrative and very profitable. In 2019, Fores compared the Yeezy brand to Air Jordan in terms of commercial and cultural impact. The brand was generating billions in revenue for Adidas.

However, on the more personal side of the business, the relationship between Kanye and Adidas was deteriorating as the years went by. As the Wall Street Journal reports, the company held a meeting in 2022 to discuss the risk Kanye’s direct exposure to employees posed.

However, the feud remained in the background and only took center stage in 2022. Adidas released the Adilette 22 sandals in May 2022 which Kanye West labeled a “Fake Yeezy” created by Adidas. He went on to say, “I’m not standing for this blatant copying no more. This is for everyone who wants to express themselves but feel they can’t cause they’ll lose their contract or be called crazy… These shoes represent the disrespect that people in power have to the talent.”

Later in August, Kanye West would speak up again this time against Adidas allegedly leaving him out of Yeezy-related planning. As mentioned earlier, he had full creative control. The situation escalated in September when Mr. West called out Adidas executives including the creative director of Adidas Alasdhair Willis via social media.

In a now-deleted post on his Instagram, he wrote, “To the creative director of Adidas Alasdhair Willis I’ve done songs with your father-in-law. How can you watch Adidas do what they’ve done to a fellow creative and not say anything and never even meet with me or call me? Why did I have to do this in public?”

In another deleted post, he wrote, “The fact [adidas] felt they could color my shoes and name them without my approval is really wild. I really care about building something that changes the world and something I can leave to my kids. They tried to buy me out for 1 billion dollars [USD]. My royalties next year are 500 million dollars [USD] alone.”

In October, Adidas began reviewing its partnership with Mr. West after he wore a White Lives Matter” shirt at Paris Fashion Week. Later in the month, Kanye would make antisemitic comments on his social media accounts as well as in an interview on Fox News with recently departed Tucker Carlson.

In the interview he said, “I’d prefer my kids knew Chanukah than Kwanzaa, at least it would come with some financial engineering.”

On 25th October 2022, the company announced that it would e cutting ties with Mr. West ending the nearly decade-long partnership. In a statement, the company said, “Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.”

According to Adidas, the termination would “have a short-term negative impact of up to $250 million” and might result in a $1.3 billion revenue loss in 2023. In February 2023, Adidas and Ye struck a deal to sell the remaining Yeezy products in inventory.