Court Dismisses Shareholders’ Claims Against Adidas Over Kanye West Partnership – Arise News
Adidas has successfully defended itself against an appeal from shareholders who accused the sportswear giant of concealing misconduct by rapper-entrepreneur Kanye West, also known as Ye, before their partnership ended in 2022.
A San Francisco court ruled that Adidas did not mislead investors, who claimed they suffered losses when shares fell after the company cut ties with West.
The Yeezy collaboration had been one of Adidas’ most successful partnerships, but its collapse following a series of anti-Semitic comments by West cost the brand hundreds of millions of dollars.
West, who is not party to the lawsuit, faced widespread criticism for repeatedly making antisemitic remarks and promoting conspiracy theories. His Yeezy brand collaboration with Adidas was put under review after he presented a “White Lives Matter” T-shirt at a 2022 fashion show. Shortly after, he posted anti-Semitic comments online, prompting Adidas to withdraw his products from sale.
West’s actions also led several companies, including Gap and JP Morgan, to sever ties with him.
Court documents filed on Wednesday show that HLSA-ILA Funds, representing the investors, alleged that Adidas “internally grappled” with West’s behaviour but misled shareholders by not disclosing the risks in reports.
The 9th US Circuit Court of Appeals in San Francisco sided with Adidas, stating that a reasonable investor would understand a partnership with a celebrity like West carries “inherent risks relating to improper behaviour.”
A district court had previously dismissed the case, and HLSA-ILA later appealed. The breakdown of the Adidas-West partnership caused the company’s share price to plummet in 2023.
Yeezy, luxury trainers designed by West, had generated around €1.5bn (£870m; $1.17bn) in sales in 2021. Following the split, Adidas was left with over €1bn worth of Yeezy shoes in storage and announced plans to sell them, donating some proceeds to charities combating hate.
Faridah Abdulkadiri
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