From ending their partnership with Kanye West over his antisemitic comments to rumours about burning over $500 million worth of Yeezy stock, the brand has had the run of it lately. While they are still figuring out what to do with all the surplus, at a crossroads of what to do, Adidas is now apparently being sued by investors because of the massive financial losses it has suffered because of the once successful collaboration with Ye. Now, Adidas is being sued by its investors because they claim the brand knew about the risks of entering a partnership with the controversial rapper but decided to go forward anyway. Curios? Keep reading!
RELATED: Adidas May Burn $500 Million Worth Of Yeezy Sneakers
Investors Are Suing Adidas
According to CNBC TV 18, investors took Adidas to court in Oregon over the Yeezy partnership that the company entered with Kanye West in 2013. According to the investors, Adidas was allegedly aware of the risks associated with continuing the partnership that had started in 2013 and was made aware of it well before Ye’s antisemitic outbursts.
However, a 2018 report made it clear that Adidas disregarded the issues that had begun to present themselves by “generally alluding” to them rather than mentioning to the investors that “the company had actually considered ending the partnership as a result of West’s personal behaviour.”
Investors feel that had this information been adequately shared with investors and the rest of the company, many of the issues they are now facing could have been avoided. As a result, they wouldn’t be experiencing the financial loss they are currently experiencing.
RELATED: Looking Back At The 10 Best Yeezy Sneakers Of All Time, Ranked
Financial Losses as A Result Of Drama With Ye
Adidas has suffered a tremendous financial loss since it decided to sever the deal with Kanye West and blamed the controversial rapper for their problems. Their current loss is about $1.3 billion as of this year. A further statement obtained by TMZ shared that Adidas still possesses about $534 million worth of Yeezy stock, which they hope to repurpose under a different name. Still, they will lose that entire $534 million if they can’t. This is where the rumours that Adidas was ready to burn the stock first came from.
There are still debates going on about what Adidas is going to do with all the extra stock, with repurposing it being a monetarily safe but morally ambiguous choice, with other choices being destroying the supply or donating it, which all options come with their own set of risks that need to be considered.
RELATED: Adidas Has Received 500 Offers For Unsold Yeezy Inventory
In February of this year, Adidas and Ye reportedly agreed to allow Adidas to unload the remaining designs in the Yeezy collection and release and promote the existing products made under the previous deal that had been cancelled. However, it doesn’t give them any rights to continue the collection.
- Adidas is being sued by its investors over the losses the brand has suffered because of ending its partnership with Kanye West.
- Investors claim that Adidas was aware of the risk in 2018 already and had been considering ending the partnership but decided to continue anyway.
- Adidas has already lost $1.3 billion and could stand to lose even more by the end of the year.