Adidas shareholders sue over the collapse of its Yeezy partnership

completemusicupdate.com:

Adidas shareholders have filed a class action lawsuit against the sportswear company in relation to the collapse last year of its partnership with Kanye West.They claim that bosses there were aware of the problematic behaviour of the firm’s long-term celebrity partner and therefore should have done more to mitigate the commercial impact of any controversy that would necessitate the axing of that partnership.West and Adidas had a long and very profitable alliance around the former’s Yeezy brand, but that came to an end last October in the wake of the rapper making a number of racist and antisemitic statements.At the time, the sportswear firm stated: “Adidas does not tolerate antisemitism and any other sort of hate speech.

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”.“After a thorough review”, it went on, “the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products and stop all payments to Ye and his companies.

Adidas will stop the Adidas Yeezy business with immediate effect”.The sudden axing of the partnership had a significant impact on Adidas, with analysts reckoning that Yeezy products generated about 10% of the company’s annual revenues.

It was also revealed that Adidas could lose up to €1.2 billion on unsold Yeezy products if it decides not to sell them and, with that in mind, the company warned investors that it could report its first loss in three decades.The new lawsuit filed in the US last week says that Adidas bosses knew about West’s erratic behaviour and potential to make statements that would make any partnership.