Adidas is facing a class-action lawsuit from investors who claim the company failed to disclose Kanye’s racism – despite knowing of his anti-Semitic remarks.
The German sportswear company cut ties with the rapper in October 2022 after a tirade of hateful comments. Now investors are claiming that Adidas executives were aware of anti-Semitic remarks made by Kanye in 2018. Annual reports have not disclosed that the rapper made anti-Semitic remarks towards Adidas employees. One of those comments was to suggest the name Adolf Hitler for an album. Adidas has not responded to requests for comment on the lawsuit.
Despite the termination of the deal with Yeezy, Adidas continued to receive and sell Yeezy-branded merchandise. The company currently has billions worth of merchandise that it can’t offload because it doesn’t want to get negative publicity for selling anything associated with Kanye’s name.
The Complaint alleges that the Defendants made and/or failed to disclose materially false and/or misleading information throughout the Class Period (1) In addition to other transgressions, Kanye West made anti-Semitic remarks in front of adidas employees and even suggested naming an album after Adolf Hitler. (2) adidas was aware of his behavior and failed to inform investors that it was aware of this behavior and had assumed that the termination of the partnership was a consequence;
(3) adidas failed to take reasonable precautions to limit negative financial risks should the partnership end due to West’s conduct; (4) adidas has overstated the risk mitigation measures it has taken on Yeezy shoes should it end the partnership; (5) As a result, Defendants’ public statements were materially false and/or misleading at all relevant times. When the true details came out, the lawsuit alleges that investors suffered harm,” the class-action lawsuit states Summary reads.
The lawsuit represented Purchasers of adidas securities between May 4, 2018 and February 21, 2023. The class action is also seeking a lead plaintiff to represent all of the joining plaintiffs.