More trouble is brewing for adidas, as investors are suing the company over its failed partnership with Ye. Last year, the brand dropped Ye and his Yeezy line over his anti-Semitic comments and increasingly erratic behavior.
The lawsuit, filed Friday in a U.S. District Court in Oregon, alleges that adidas withheld knowledge regarding West and his behavior dating back to 2018. In an annual report from that year, the suit goes on to say adidas “generally alluded” to the risks “rather than stating that the company had actually considered ending the partnership as a result of West’s personal behavior.” Reports in following years failed to disclose Ye's anti-Semitic comments to adidas staff, including his idea to name an album after Adolf Hitler.
adidas has denied any wrongdoing and plans to defend itself against the lawsuit vigorously. The company said the Ye partnership was ended due to strategic differences and that the decision was mutual. Once the relationship ended in October 2022, the company's stock price dropped by 6 percent. Still, adidas continued to accept shipments of Yeezy branded footwear from their suppliers. Currently, there is an estimated value of $1.3 billion worth of adidas Yeezy merchandise sitting in warehouses. adidas is still deciding what they are going to do with the remaining Yeezy product, with options to sell it at retail or destroy it.
The potential impact of this lawsuit remains to be seen, as it is still fresh in the courts. While cases like this can result in significant financial penalties, they can also be dismissed or settled out of court. However, it is clear that the lawsuit has already caused some damage to adidas' reputation and could further affect investor confidence in the company.
The adidas investor lawsuit over the broken Ye partnership is a reminder that even the biggest and most successful companies are not immune to legal challenges. As the sportswear industry continues to evolve and competition heats up, it will be interesting to see how companies like adidas adapt and navigate the legal landscape.
To stay up-to-date on this adidas lawsuit, as well as what will happen with the Yeezy line, keep it locked to our Twitter as well as the Sole Retriever mobile app.
Source BOF
