Adidas called into question by investors for the “Ye case”: the incriminated partnership with Kanye West
There is no peace for Adidas. The well-known sportswear brand continues to have to deal with problems. The last, only in chronological order, is the cause that some investors have decided to sue Adidas. The reason for the lawsuit – filed last week in Oregon federal court – is the accusation that the company was aware of the risks that the partnership with West would entail, long before the recent scandals, even in 2018. Among defendants there is also the name ofex AD Kasper Rorsted.
The “crime” began – or at least “media diffusion” – at the end of last year, in particular in October, when the upper floors were forced to interrupt the collaboration with the American rapper Kanye West, in the art of “He”, after the defamatory statements deemed anti-Semitic. In fact, in the official note the company had declared: “Adidas does not tolerate anti-Semitism and any other form of hate”. Adding: “Ye’s recent comments and actions have been unacceptable, hateful and dangerous and violate the company values of diversity and inclusion, mutual respect and fairness.”
Hence the choice of terminate the “problematic” partnership – in terms of brand reputation – and, consequently, the discontinuation of the Yeezy line. This was despite the possible decline in earnings, which invariably then occurred. The In fact, Adidas’ 2022 budget closed clearly negative: 254 million euros against 1.49 billion in 2021. And now, the unsold Yeezy line is likely to send the company a loss of 1.2 billion in revenue in 2023. Revenue increased by 6% to 22.51 billion in 2022, with an EBITDA by 47.3 percent. In parallel, according to what was leaked by social networks and the American media, the Ye’s comeback may be close.
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