Adidas AG: The Yeezy Partnership

In 2013, Germany-based athletic products maker Adidas AG (Adidas) formed a partnership with rapper Kanye West (who legally changed his name to Ye in October 2021) to launch the Yeezy shoe line. Starting in the 1980s, sneakers had crossed over into the mainstream market as fashion accessories and Adidas saw this as a way to catch up with industry leader Nike Inc. While the partnership was lucrative for Adidas—its sales and profits grew substantially during the partnership period—West’s public behaviour and in his dealings with Adidas employees caused both external and internal backlash. At first, Adidas ignored West’s adverse behaviour and pushed hard to monetize the relationship. Following a widely publicized action by West at a Yeezy fashion show in Paris, France, in October 2022, Adidas discontinued the partnership. However, HRSA-ILA Funds, an employee retirement fund manager, filed charges in late 2023 accusing Adidas of condoning West’s behaviour and not disclosing it to its shareholders. Adidas’s supervisory board chair, Thomas Rabe, and newly appointed chief executive officer, Bjorn Gulden, had to address both the legal and business consequences of the company’s actions.

This case covers corporate social responsibility, stakeholder management, and ethics in managerial decision-making. While these topics are covered in various business program courses, this case is best positioned in an upper-level undergraduate or graduate course in strategic management. The suggestion is to use the case early in the course after fundamental concepts on strategy and the role of top management are introduced.<br><br>After reading, analyzing, and discussing the case, using Bloom’s taxonomy, students should be able to <ul><li>understand the concept of stakeholders;</li><li>contrast various stakeholders and their impact on a company;</li><li>evaluate decisions from an ethical perspective; and</li><li>develop recommendations to address issues related to conflicting stakeholder expectations.</li></ul>

• Corporate governance
• board of directors