Adidas deceived investors about Kanye West concerns, lawsuit says
Listen 4 min Comment on this story Comment Gift Article Share
Adidas was long aware of the erratic behavior of its former star collaborator, Ye — the rapper formerly known as Kanye West — and the potential harm it could cause the company, but failed to warn investors about it, a class-action lawsuit alleges. Wp Get the full experience. Choose your plan ArrowRight Adidas’s former chief executive officer, Kasper Rorsted, and chief financial officer, Harm Ohlmeyer, “intended to deceive” investors by failing to disclose ongoing issues between the company and Ye, according to the lawsuit filed Friday against Rorsted, Ohlmeyer and Adidas in U.S. District Court for the District of Oregon. The German company’s North American operations are headquartered in Portland. Ye is not named in the suit.
In its heyday, Adidas’s partnership with Ye was incredibly fruitful for the company, with its Yeezy shoe and clothing collections quickly becoming a streetwear favorite. But cracks started to form over the years as Ye made increasingly controversial comments. He said in 2018 that slavery “sounds like a choice” because it had lasted for four centuries, adding that “slavery is to Blacks as the holocaust is to Jews.”
Responding to the backlash set off by the remarks, Rorsted said at the time in a televised interview with Bloomberg that there were “some comments we don’t support,” but that “Kanye has been and is a very important part of our strategy and has been a fantastic creator.”
Then, in October 2022 at the Yeezy show at Paris Fashion Week, Ye wore a shirt displaying the slogan “White Lives Matter,” which the Southern Poverty Law Center has described as “a racist response to the civil rights movement Black Lives Matter.”
Advertisement
That month, he also threatened to go “death con 3” on “JEWISH PEOPLE,” an apparent reference to Defcon, the U.S. military defense readiness system. In the tweet, which was removed by Twitter, he used antisemitic tropes and said he could not be antisemitic “because black people are actually Jew also.”
In a podcast interview released that month, he boasted that he could make antisemitic remarks and Adidas would not sever ties with him. “I can say antisemitic things and Adidas can’t drop me. Now what?” he said.
The tumult apparently proved to be the last straw for Adidas, which announced Oct. 25 that it would immediately “end production of Yeezy branded products and stop all payments to Ye and his companies.” Adidas “does not tolerate antisemitism and any other sort of hate speech,” it said in a statement at the time. “Ye’s recent comments and actions have been unacceptable, hateful and dangerous.”
Advertisement
But the lawsuit filed on behalf of Adidas stockholders alleges that the company had for years been aware of the potential harm Ye could cause them. It also accuses the company of failing to properly limit its financial exposure amid the risk posed by Ye and alleges that statements made by the company were “materially false and/or misleading at all relevant times.”
The lawsuit cited a report by the Wall Street Journal in November 2022 that said Adidas executives, including Rorsted, had discussed the risk of Ye’s behavior and mulled cutting ties with him.
Ye has previously spoken, though not extensively, about an apparent struggle with bipolar disorder.
The suit, which is seeking unspecified damages and the payment of the class action’s legal fees, noted a fall in Adidas shares following the Journal’s report, and a credit downgrade in February this year after the company disclosed that it had as much as $500 million in unsold Yeezy merchandise.
Adidas did not respond to a request for comment on behalf of the company and Ohlmeyer late Sunday. Rorsted could not immediately be reached for comment. Adidas said in a statement to the BBC that “We outright reject these unfounded claims,” adding that it “will take all necessary measures to vigorously defend ourselves against them.”
GiftOutline Gift Article
Source: The Washington Post
