By Erica Johnson
- Kanye West’s sneaker and apparel business with Adidas and Gap are valued at $3.2B – $4.7B by UBS
- He went from being $16M in debt, to being one of the richest rappers in the world at a whopping $6.6B net worth
Since Run DMC’s “My Adidas”, the footwear and apparel brand has become synonymous with hip-hop culture. Beyonce’s Ivy Park and Kanye West’s Yeezy are just two of the major partnerships with celebrities that keep Adidas (ADDYY +1.27%) at the forefront of fashion and culture for both new and younger audiences. Seeing this blueprint and precedent, the Gap (GPS +3.28%) hopes to capitalize off the culture and Kanye’s $3.4 billion to $4.7 billion Yeezy brand brilliance in the same way.
Why This Matters: As brands grow and develop, relevance is an important part of increasing revenue. Even though West comes off as a mad scientist at times with his often on again, off again flippant comments and behavior, he’s still a “business” man. West has an incredible amount of clout and no matter what he does he still ends up on top. He went from being $16 million in debt to being one of the richest rappers in the world at a whopping $6.6 billion.
West’s sneaker and apparel business with Adidas and Gap are valued at $3.2 billion to $4.7 billion by UBS with roughly $970 million attributed to the new Gap Yeezy partnership dropping in stores this summer, according to Bloomberg. As the sole owner of the trademark rights of the Yeezy brand, West retains creative control allowing him to keep his brand partnership with the Gap relevant and in step with cultural changes.
Situational Awareness: While Covid-19 has caused Gap to close more than 30% of its stores, sales for Yeezy’s Adidas sneakers remained resilient through the pandemic, growing 31% to nearly $1.7 billion in annual revenue last year, and netting [Mr. West] $191 million in royalties, according to a UBS report. For entertainers and celebrities, like West, it means that their cultural capital retains the value that even longstanding brands can’t match. However, for a price, it seems like everything is for sale.
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