By Brooke Sinclair
- Ye’s high-end clothing companies Yeezy and Yeezy Apparel have just settled a $950K lawsuit for slow product shipping
- The Yeezy brand most likely suffered from the same supply chain delays as the rest of the world, but failed to communicate or accommodate its customers
Billboard estimates rapper and fashion mogul Kanye West is worth $4 billion, but his high-end clothing companies Yeezy and Yeezy Apparel are LLCs that have just settled a lawsuit for $950,000 for slow product shipping. Let this story be a lesson to entrepreneurs everywhere, being sued is the first warning from startup lawyers when advising founders on the difference between LLC versus C-Corp. West’s sneaker and apparel collabs with Adidas (ADDYY 0.47%) and Gap (GPS +6.52%) have been valued at $970 million by Bloomberg, but neither of those companies were named in the suit.
Why This Matters: Yeezy was sued for unlawful business conduct of a California company. The company violated state law by falsely advertising 30 day shipping then failing to deliver the items. Under the settlement, companies are banned from “untrue or misleading representations regarding a shipping timeframe or refund,” according to the Los Angeles DA’s office. To add insult to injury, YeezySupply.com offered speedier shipping for an extra cost on its website even though the nation was already experiencing delays in the supply chain.
Essentially Kanye was fined $950,000 by district attorneys of Los Angeles, Sonoma, Napa, and Alameda counties. He agreed to pay $800,000 in civil penalties, $50,000 in restitution to a state consumer protection fund, and $100,000 in investigative costs. Not customers.
District attorney, George Gascón, said, “Online consumers are entitled to protection against unwarranted fees and unreasonably long waits for purchases to arrive on their doorsteps.” The company must “adhere to laws relating to the issuance of delay notices; and [are] required to refund money to consumers who, in the future, purchase products that are not shipped in a timely fashion.”
CultureBanx published my story about Kanye’s puffy nylon “smurf jackets” in July after pre-orders sold out in hours. We projected Gap would use presales to attract customers back to brick-and-mortar stores after the pandemic, but that does not seem to be the case. These puffy jackets were the first of the Gap clothing line and have quickly sold out.
Situational Awareness: A valuable lesson for entrepreneurs is to communicate with your customers, consistency is key, and know how your product moves from the supplier to its final destination. Entrepreneurs should take notice of Kanye’s example. He is nothing if not consistent. Consistently inconsistent, but he is always himself. For better or worse, Kanye West is unapologetically himself…and he ain’t broke.
CBx Vibe: “Million Dollar Man” Lana Del Ray