A group of investors has initiated legal action against Adidas.
A group of investors has initiated legal action against Adidas. The reason was the sports giant's declining operating performance after breaking its contract with Kanye West's Yeezy.
In their lawsuit, investors who bought the company's securities from 2018 to 2023 claim that Adidas was aware of the risks when it entered into the partnership agreement with West, but failed to minimize losses after the contract was terminated.
According to unconfirmed reports, Adidas discussed the potential risks associated with West's behavior in 2018. At a time when West had already been seen making harsh remarks, Adidas management decided not to address the risks involved.
"There are some comments that we don't support. Kanye was and remains a very important part of our strategy and has been a fantastic creator," former CEO Kasper Rorsted noted at the time.
According to the shareholders who initiated the lawsuit, Adidas was able to take precautions to minimize its risks "in the event of a sudden termination of the partnership, and in particular, if demand for shoes falls due to any controversy around West."
It was reported that the German manufacturer could lose more than $1 billion because of the breakdown of its relationship with West. The company denied this information, saying that the claims are unfounded and intend to take measures to protect themselves from accusations.
2 MAY 2023, Germany