In the Yeezy shoe brand, a collaboration between German shoemaker adidas and prolific showman and artist Kanye West, we see what becomes of a disciplined business model with a thoroughly undisciplined creative at the helm. WARC’s Lona Meza looks at how the artist switched from a desire to emulate to a desire to create, one that adidas would embrace.
Forbes’ recent cover story on Kanye West gives us a peek into the world of a man that took a purported $53m loss and three years later, turned it into a $1.5bn brand.
To understand how he (and we) got here, we must cast our minds back to February of 2016. Among the slew of terrible news that year we find a rather poignant memory of Kanye’s unceremonious (and since deleted) Twitter plea to Facebook founder Mark Zuckerberg for a cool billion dollars.
It began with an imperative: “Mark Zuckerberg invest 1 billion dollars into Kanye West ideas”, before taking a more pragmatic stance: “hey Larry Page I’m down for your help too”. Outbursts and rants have been as much a feature of his persona as of his early business activity.
While we might speculate as to the context of Kanye’s struggles in tweet-form, the content of others, namely his admission that he is “53 million dollars in personal debt…” spoke to the costs associated with pursuing a career in the merciless fashion industry.
West is not the first celebrity to be burned as his fashion dreams hit industry reality. A 2016 Vanity Fair article noted exactly how the costs stack up for the likes of West who have “grand visions without the slightest idea of what they might cost to execute.”
From the ‘Pastelle’ brand in 2009 to the luxury womenswear venture, ‘Kanye West’ two years later, to the Nike Air Yeezy collections peppered between, Kanye’s fashion projects have varied in their success. West has always had big ambitions – his first footwear line showed as much – but none has come close to what Nike created with Air Jordan. Simply, he wanted more.
Nike Air Yeezys: a limited run
The Nike Air Yeezys that dropped in 2009, 2012 and 2014 were, in every way, a manifestation of West’s desire to reach iconic Air Jordan status. But, while he emulated the Jordan brand in both name and design style, the success didn’t quite translate the way Kanye had envisioned.
West felt frustrated with the company, which he felt had treated him “like just another celebrity dabbler,” Forbes reported. Even more frustrating for West, he was unable to get the royalties that Nike reserved for its athletes. “I told them, I go to the Garden and play one-on-NO-ONE. I’m a performance athlete,” West declared. “And also, I’m a thinker!”
As the ever-vocal West talked-up these issues, the relationship with Nike cooled. In comments reported by Complex, former Nike product line manager, Esaie Witherspoon admitted that “when the rants started, I was like, ‘It’s a wrap ... put a fork in it.’”
In this relationship, despite growing sales of the Air Yeezy II, Nike’s stringent production demands clashed with West’s domineering approach to business, creating a gulf that Nike was unable to close.
But the episode points to another shift. In November of that year, West told an audience in Nashville that he had wanted “as many Yeezys as there was LeBrons [the basketball player’s signature Nike shoe, which are widely available], and I wanted them to be at a good price, but that was not my choice”. Oddly, it would take Kanye relenting with his new partners for the Yeezy model to truly flourish.
In Nashville, Kanye declared his intent: “to create more than you think that any musician in the history of time ever could have."
Adidas Yeezy Boost: curated creativity
The adidas Yeezy Boost 350 V2. Img source: Yeezy Supply
That same month, Kanye announced his defection to adidas in typically low-key fashion. “I’m gonna be the Tupac of product,” he told Hot 97.
At the time, adidas had much to gain from a partnership with West. Not only did the German firm trail its rival Nike, it was selling less than the young American sports brand Under Armour. Coming to a deal with adidas relied, equally, on a shift in Kanye’s priorities – after becoming a father in 2013 he was looking for something that would continue to reap rewards long after his involvement.
Though West signed with adidas in 2013, it was a change of management in 2016 that saw him close an unheard-of deal: a 15% royalty on wholesale. What’s more, he retained 100% ownership of the Yeezy brand. This deal, when compared with Michael Jordan’s Nike royalties – around 5%, per Forbes – makes it clear where Kanye’s ambitions of himself and his ventures were aimed.
Now his Yeezy shoe brand is on track to top $1.5 billion by the end of this year, around half of Air Jordan’s $3bn in annual sales. Air Jordans have been around since the 90s, however; Yeezy’s have reached that figure in just six years.
The chaotic celebrity that engulfs Kanye – and which restricted his deal with Nike – is what has helped him cement success with adidas, which appears to be comfortable with his relentless creativity, siphoning off the finest items for its coveted product drops. This model of scarcity and exclusivity is maintained by surprise drops that regularly, West revealed in 2016, sell out “40,000-pair drops in minutes.”
While West claims not to be a ‘numbers guy’, he has refined his understanding of the brand’s value. In the Forbes interview he observes that “what makes celebrity products sell so well is scarcity”. To avoid undermining the business model, the intent is to not make them too broadly obtainable. He has also benefitted from his professionally famous (and hugely effective) in-laws, who are ever present and available to promote the range online and increase its desirability.
Adidas’ measured approach to sales keeps such frenzied demand tightly wound. As reported by Forbes, the company’s chief executive Kasper Rørsted insists that, “Yeezy sales will not make up a significant share of adidas’ overall expected sales growth.” The company is choosing instead to have “a disciplined approach to managing volumes and product lifecycles.”
While West’s brand still has a way to go to truly reach the dizzying heights of success that would be required for him to become a billion-dollar designer, the momentum has been set and the restless West will get there soon. As for his broader ambitions, look back to 2013 and his appearance on Hot97: “I’mma be bigger than Walmart!”