Adidas wants to move on from the Kanye West scandal, but investors are angry and suing
- Investors sued Adidas over its failed Kanye West deal, arguing it didn't properly manage the risk.
- Adidas called the claims "unfounded" and said it will "vigorously" defend itself.
Investors filed a potential class-action lawsuit against Adidas on Friday, arguing the company didn't adequately manage the risks in its partnership with the artist Ye, formerly known as Kanye West.
Adidas split with Ye in October in the wake of repeated antisemitic comments. The company has not said what it will do with its remaining $1.3 billion of Yeezy merchandise.
In the lawsuit, investors claimed Adidas "ignored serious issues" with regard to Ye's "extreme behavior," and didn't properly manage the resulting risks, including with inventory. Investors seek to make the lawsuit a class action.
If certified, the lawsuit would proceed on behalf of investors who purchased shares of Adidas between May 3, 2018, and February 21, 2023.
The lawsuit cites a Wall Street Journal report from November that noted Adidas executives discussed the risks of partnering with Ye "four years ago."
"We outright reject these unfounded claims and will take all necessary measures to vigorously defend ourselves against them," an Adidas spokesman told Insider in a statement.
In the wake of splitting with Ye, Adidas, under new CEO Bjørn Gulden, is focusing more on sports, including basketball and soccer, as Gulden works to reset the brand.
"We want to double down on all of the things that are US-centric, particularly around sport," Rupert Campbell, president of Adidas North America, recently told the Wall Street Journal.
Adidas also expects its Samba, Gazelle, and Spezial sneakers to pick up some of the slack for the Yeezy brand.
The lawsuit was filed by the Hampton Roads Shipping Association, International Longshoremen's Association, based in Virginia.
The organization purchased 2,837 shares of Adidas stock in early 2022 for more than $350,000, according to an exhibit attached to the lawsuit.
It sold the shares in December 2022 for a roughly $175,000 loss.