Sales debacle because of Kanye West: US shareholders are suing Adidas

Sales debacle because of Kanye West
US shareholders are suing Adidas

The separation from Kanye West is a slap in the office for Adidas. At the company’s US headquarters, investors are filing a class action lawsuit for damages. The management made mistakes when working with the rapper, it is said as a reason.

The sporting goods manufacturer Adidas has rejected allegations by US plaintiffs about the earlier cooperation with the controversial rapper Kanye West. “We firmly reject these unfounded claims and will take all necessary measures to vigorously defend ourselves against them,” said the group in Herzogenaurach. In a class-action lawsuit filed in Oregon federal court last Friday, an investment fund has accused Adidas of failing to work with West, which was terminated last October over the rapper’s anti-Semitic remarks.

Despite earlier controversial statements by the musician and fashion entrepreneur, Adidas has stuck to a cooperation, although it was clear that this could damage the company. Adidas also failed to take adequate precautions against possible financial losses in the event of the partnership with West ending.

Adidas ended its collaboration with the 45-year-old rapper in October after he tweeted threats against Jews. With that, the Yeezy line of athletic shoes, developed and promoted with West, was discontinued. For Adidas, this was a big blow from a business point of view.

damages in an undisclosed amount

The class-action lawsuit alleges that West, who now calls himself Ye, has caused controversy in previous years with comments on slavery, race and politics. Among other things, reference is made to a sentence from 2018 when the rapper said that black people had a “choice” when it came to slavery in the United States.

The plaintiffs are seeking undisclosed damages from Adidas. Shareholders who bought Adidas shares between May 2018 and February 2023 can join the class action lawsuit. The lawsuit was filed in Oregon because Adidas has its US headquarters there. The lawsuit is directed against Adidas, former CEO Kasper Rorsted and Adidas CFO Harm Ohlmeyer.

Adidas 159.24

Adidas’ net profit collapsed last year by 83 percent to 254 million euros. For the current year, the company expects at best an operating result of zero and at worst a negative balance of 700 million euros. The Kanye West disaster is largely responsible for this. A key question for Adidas is what will happen to the millions of shoes from the discontinued collaboration with West.

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