Adidas is facing a class-action lawsuit from investors who claim the company didn’t disclose Kanye’s racism—despite knowing about his anti-Semitic comments.
The German sportswear company cut ties with the rapper in October 2022 after a tirade of hateful comments. Now investors claim that senior executives at Adidas knew of anti-Semitic comments made by Kanye in 2018. Annual reports failed to disclose that the rapper made anti-Semitic comments to Adidas staff. One of those comments was suggesting the name Adolf Hitler for an album. Adidas has not responded to requests for comment about the lawsuit.
Despite ending the deal with Yeezy, Adidas still continued to receive and sell Yeezy-branded merchandise. It currently has billions worth of merchandise that it cannot unload as it doesn’t want the negative publicity of selling anything tied to Kanye’s name.
According to the lawsuit throughout the Class Period, defendants made materially false and/or misleading statements and/or failed to disclose that (1) in addition to other misconduct, Kanye West made anti-Semitic comments in front of adidas staff, and even suggested naming an album after Adolf Hitler; (2) adidas was aware of his behavior, and failed to warn investors that it was aware of that behavior, and had considered ending the partnership was a result of it;
(3) adidas failed to take meaningful precautionary measures to limit negative financial exposure if the partnership were to end as a result of West’s behavior; (4) adidas overstated the risk mitigation measures it took with regard to Yeezy shoes in the event that it terminated the partnership; (5) as a result, Defendants’ public statements were materially false and/or misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages,” the class-action lawsuit summary reads.
The lawsuit represents purchasers of adidas securities between May 4, 2018 and February 21, 2023. The class-action is also seeking a lead plaintiff to represent all plaintiffs who join.