Investors have filed a class action lawsuit against sportswear giant Adidas, claiming the company was aware of Kanye West’s problematic behaviour years before their falling out.
Investors allege Adidas failed to minimise financial losses or take precautionary steps to limit their exposure to the designer and rapper.
In a statement responding to the lawsuit, Adidas said: “We outright reject these unfounded claims,” adding that it “will take all necessary measures to vigorously defend ourselves against them”.
Adidas ended its tie-up with West, now known as Ye, in October last year after the rapper made antisemitic remarks on social media.
Since the parting of ways, which left Adidas with a large amount of unsold product, the business’ EBITDA fell to €1.8bn (£1.6bn) for the 12 months to December 31, 2022, down 39% from the previous year. Operating profits plummeted 66% to €669m (£596.32m).
At the time, Adidas chief executive Bjørn Gulden said: “The numbers speak for themselves. We are currently not performing the way we should.
“2023 will be a year of transition to set the base to again be a growing and profitable company. We will put full focus on the consumer, our athletes, our retail partners and our Adidas employees.
“Together we will work on creating brand heat, improve our product engine, better serve our distribution and assure that Adidas is a great and fun place to work. Adidas has all the ingredients to be successful: a great brand, great people, fantastic partners and a global infrastructure second to none.
“We need to put the pieces back together again, but I am convinced that over time we will make Adidas shine again. But we need some time.”
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