Adidas sued by investors over Kanye West deal
Adidas, the German sportswear giant, is facing a lawsuit from investors who claim that the company made misleading statements about the success of its partnership with rapper Kanye West. The lawsuit, filed in a federal court in Oregon, alleges that Adidas failed to disclose that its collaboration with West was struggling, causing the company’s stock to drop when the truth was revealed.
Allegations in the Lawsuit
According to the lawsuit, Adidas made false and misleading statements about the success of its partnership with West, leading investors to believe that the collaboration was thriving. However, the lawsuit alleges that Adidas was struggling to sell West’s Yeezy sneakers and apparel, and that the company’s financial results were being negatively impacted as a result.
The lawsuit claims that Adidas knew about the issues with the West collaboration but failed to disclose them to investors, which resulted in inflated stock prices. When Adidas finally did acknowledge the issues, the stock price dropped, causing investors to suffer financial losses.
The Kanye West-Adidas Partnership
Adidas partnered with Kanye West in 2013 to create the Yeezy line of sneakers and apparel. The collaboration was seen as a major coup for Adidas, as West is one of the most influential figures in popular culture.
The Yeezy line has been wildly popular with consumers, with many of the limited-edition sneakers selling out almost instantly. However, the lawsuit alleges that the success of the line has been overstated, and that Adidas has struggled to keep up with demand.
Adidas has not yet responded to the lawsuit, but the company has previously defended its partnership with West. In a statement released in 2019, Adidas CEO Kasper Rorsted said that the Yeezy line was “one of the most successful shoe launches in history” and that the collaboration with West had been “extremely successful.”
The lawsuit is just the latest in a string of legal troubles for Adidas. The company has faced allegations of bribery and corruption in recent years, and in 2018, three Adidas executives were sentenced to prison for their roles in a scheme to bribe college basketball recruits.
The lawsuit against Adidas highlights the potential risks that companies face when partnering with celebrities. While these collaborations can be highly lucrative, they also come with a significant amount of risk. Companies need to be transparent with investors about the success of these partnerships, and they need to be prepared for the possibility that things may not go as planned.
Investors, on the other hand, need to do their due diligence and carefully consider the risks associated with these types of collaborations. While the allure of working with a celebrity may be strong, investors need to remember that there are no guarantees in business, and that even the most successful collaborations can come with unexpected challenges.