Amidst Adidas drama and apparel success, what are the next steps for Ye in building Yeezy shoes into a billion-dollar brand?
Earlier this month, everyone was anticipating Yeezy Day except Kanye West himself.
As fans flocked to the Adidas Confirmed App in hopes of hitting on a restock and the return of the “Turtle Dove” Yeezy Boost 350, Ye took to another app, Instagram, to air his grievances with both the holiday and his corporate partner in Herzog.
In a direct message to Complex made public across social media, Ye publicly insisted that Adidas “made up the Yeezy Day idea” without his approval. Around the same time that the message was making its rounds across the web, sneakerheads around the world were taking Ls on the Confirmed App, feeling let down by the anticipated shopping celebration itself.
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Yeezy Day, which took place on Aug. 2 this year and in each one since 2019 with no official acknowledgment of its ultimately unofficial nature, came on the heels of Ye blasting the brand for allegedly “knocking off” his super-popular sandal style. In recent months, Ye has gone to Instagram to broadcast his displeasure with, yes, certain dating tendencies related to his family, but also to share his desires to sit down with the CEO of Gap. In the anti-Adidas message, West accused The Three Stripes of taking talent from his Yeezy team, lying about the ability to produce more Yeezy Slides, and interfering with the production of Yeezy Gap by Balenciaga footwear.
Perhaps most notably, he insisted that Yeezy product accounts for 68% of Adidas’ online sales.
Whether working with Nike at the end of his tenure in Beaverton or complaining publicly about his record contracts, West has been bold in his approach to airing personal displeasure with corporate partners. Whether one agrees or disagrees with this communication style is a personal opinion, but what does prove to be true is that Ye has a knack for getting out of a deal he dislikes and ending up with one he does.
So, what does the future of Yeezy shoes look like? Who will be along for the ride with Mr. West, and where?
By reading the tea leaves and looking at the industry, let’s explore go through the most viable options.
Staying Put
In 2016, Kanye West and Adidas announced a long-term relationship. The press release from the company called it “the most significant partnership ever created between a non-athlete and an athletic brand.” It was said to include the opening or rebranding of retail stores specific to YEEZY, something that is still yet to materialize.
At the time, the deal was estimated to be worth $10 million, though it’s likely much more than that considering the billion-dollar success of the brand. When considering the expectations internally at Adidas surrounding the signing of Kanye in 2013 and previous pairings with artists and third-party designers, it quickly became clear what Ye and Adi could accomplish together was far more than what any prior partnership could have forecast.
“I think people look at that business today and think that was what it was intended to be,” former Yeezy GM Jon Wexler told Boardroom in May 2022. “I think that’s what Kanye intended it to be. I think I intended it to be that, but I’m not sure that was the plan up front. Those businesses were typically thought of as three to four SKUs, small product collaborations. Move in, move out, and transactionally roll through whoever is the shiniest person or brand is.”
With the 2016 extension, Ye currently remains under contract with Adidas until 2026. Naturally, at the time of signing, he was elated with the new deal and his vision coming to life — “This partnership illustrates that anyone with a dream can dream without limitations,” West said at the time — but in recent years, both Eric Liedtke, then an Adidas board member and exec, and Wexler, the person responsible for bringing Ye to Adidas and eventually general manager of the Yeezy brand, have both parted ways with the Three Stripes. And yes, Yeezy x Adidas has ballooned into a billion-dollar business since the re-signing in ’16, but Ye hasn’t been shy about showing his public displeasure for Adidas CEO Kasper Rorsted.
“To Kasper I’m not standing for this blatant copying no more,” West wrote verbatim on Instagram in June 2022. “To all sneaker culture. To every ball player rapper or even if you work at the store. This is for everyone who wants to express themselves but feel they can’t cause they’ll loose their contract or be called crazy.”
The remarks referred to Ye’s issue with the $55 Adidas Adilette sandal that shares similar design language to that of the $70 Yeezy Slide. While it’s not uncommon for top talent at a company — whether designer, artist, or athlete — to lend a halo effect of influence on products of wider ability or price point, the implication of an imitation did not register with Kanye as flattery.
Nor does it appear to positively affect his financials.
“These shoes represent the disrespect that people in power have to the talent. This shoe is a fake Yeezy made by Adidas themselves I’m not talking to DC about this either. Kasper come talk to me Happy Monday,” Ye said.
Whether or not West could lose his Adidas contract due to an Instagram caption calling out the company’s CEO is uncertain, but more so unlikely considering Yeezy is said to make up 68% of Adidas’ online sales. While the post has since been deleted (along with the majority of uploads on Ye’s feed), Rorsted did respond publicly to Ye when prompted by CNBC on-air in August 2022.
In the segment, Rorsted assured that Adidas has “a fantastic relationship” with Ye, calling him “probably the most important” partner they’ve ever had, doubling down that Ye communicates with the brand “almost weekly.”
On the same day of the interview, Aug. 4, the brand published its Q2 2022 report. In the document, the terms “Yeezy,” “Ye,” or “Kanye” were nowhere to be found.
(To be fair neither was “Boost.”)
While West may be at odds with Adidas, he holds a significant amount of leverage considering the sheer volume of sales Yeezy accounts for. Whether or not the brand can extrapolate Ye’s cool cachet to inline products or other categories appears to be a sensitive subject for Kanye, or one that would at least come at a price — if West was able to earn an extension only one year into getting products onto the market back in 2016, perhaps he could renegotiate now.
On the other hand, perhaps he could consider a different partner entirely.
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Another Suitor
In sportswear, it is not uncommon for talent to switch companies. On the endorser end, household names such as Andre Agassi, Kobe Bryant, Serena Williams, Jay-Z, and countless others have adjusted their allegiance over the course of their career to lend their likeness to competitor brands. On the backend, designers and execs often cross over to other entities in search of sustained success.
Ye, meanwhile, occupies a unique space in which he is at once the exec, the designer, and the endorser.
Already, West has gone from Nike to Adidas in a move that absolutely shook up the entire footwear and apparel industry; not only did Kanye’s change of brands send a surge of energy to The Three Stripes, but it also forced the Swoosh’s hand to sign on a slew of Ye’s fashionable friends like Don C, Jerry Lorenzo, Virgil Abloh, and Drake.
While West met with an array of footwear companies when considering his next move back in 2013, Adidas proved best suited to express his ideas and meet his demands at that time.
It’s possible that in 2022, another suitor could be better equipped.
When considering the world of sportswear, there are few places to which Kanye could move vertically from either a cool cachet or market share perspective. After the public trouncing of Mark Parker and Nike during the Yeezus Tour in 2013 and the competitive qualities that make that brand what it is, it’s incredibly unlikely that the Swoosh would ever want to work with West again.
Around the industry, it’s unclear what company would provide a better home for the Yeezy brand than Adidas. Reebok, which was recently acquired by Authentic Brand Group, is not likely to be in a position to sign a talent as downright expensive as West, nor do they appear focused on selling shoes that start at retail prices upwards of $200. Puma proves to be a potential prospect considering the two parties met years ago when West was first considering greener pastures, but between the big brother Jay Z’s affiliation with the brand and the brotherly brooding between Rudolf and Adi Dassler that respectively birthed Puma and Adidas, the narratives run deep.
However, West previously claimed that Puma asked how could they “control him” back in 2013.
Where sportswear is concerned, few other partners seem plausible. Under Armour has endured botched attempts at working with runway designers or hip-hop artists in the past, while running brands like New Balance, On, and HOKA seem to be nicely hitting their stride. For years, West has adored the designs of Vans, often wearing them or referencing them in lyrics when squabbling with Adidas, but from a tech and finance standpoint, they make little sense as a partner.
There’s always a world in which West switches lanes into high fashion — consider his tight friendship with Demna Gvasalia of Balenciaga — or leans on incumbent apparel partner GAP to distribute footwear. That said, a high fashion partner would not provide the comprehensive reach of Adidas, while a fast-fashion partner cannot promise the scale of production.
In the Instagram post about the Adilette sandals in which West compared himself to Mel Gibson in Braveheart, he also mentioned the Mamba Spirit of Kobe. Famously, Bryant broke his Adidas contract in 2002 and later signed with Nike. Perhaps more interestingly, Kobe was said to have considered leaving Nike prior to passing to start his own footwear company.
This may be the path Ye is best prepared to pave.
Going Independent
When Kanye West released the song “FACTS” at the tail end of 2015 as a victory lap for his first year at Adidas, he attested that “all he needed was the infrastructure.” Created in 1949 and estimated to be worth $32.9 billion today, Adidas has all the infrastructure in the world thanks to distribution in both hemispheres and factories that have been running for decades.
In 2013, when West left Nike for Adidas, the idea of doing it all on his own was often raised by interviewers and just as often met with distress owing to the fact that West did try to start his own fashion labels numerous times in the ’00s and early ’10s only to hit roadblocks and rack up significant debts.
“You need proper production to bring something of certain value,” Ye told Sway Calloway in 2013. “If I’m starting small, I won’t be able to get the best pricing, I’m going to be losing money to the point where I can’t afford it. I went $13 million in debt working on my own clothing line.”
Now a billion-dollar man with veteran designers that work directly for his Donda brand rather than Adidas, Ye possess the financial capital and creative capital to try his hand at footwear alone like never before. While notorious for delayed shipments, scrapped samples, and other logistical issues that cost tons of money and create a multitude of issues, it’s uncertain whether lacking the guardrail of a partner’s standards would allow the Yeezy brand to build itself up without friction or fracture, free of the traditional constraints.
What is almost certain is that Ye no longer need Adidas to make his products appear any cooler or any more capable. After all, since the start, most Adidas Yeezys have had little to no Three Stripes branding. Furthermore, the trademark Boost technology that amplified early models has been somewhat filtered out of recent styles. And of all the Yeezy sneakers currently on the market, several new designs including the infamous Foam RNR, Yeezy 700 V3, Yeezy 450, Yeezy Knit RNR, and Yeezy Slide are not reliant on Adidas’ signature Boost technology.
Furthermore, it appears West holds the keys when it comes to his likeness.
As Billboard notes, Ye retains 100% ownership of his brand and has full creative control over all Yeezy products released. If Kanye’s claims about Yeezy Day, shoe colors, and shoe nicknames are valid, this would go against said agreement with regards to creative control and execution.
In March 2021, Bloomberg reported the Yeezy shoes empire to be valued between $3.2 billion to $4.7 billion when including footwear and apparel. They went on to detail that Yeezy sales grew 31% to nearly $1.7 billion in annual revenue in 2020 alone, with Kanye netting $191 million in royalties. While he would lose all those annual royalties if he were to leave Adidas and go independent, he would have the opportunity to take on all the risk, but all the earnings as well.
If he needed to free up any additional capital to fund it, Valentiem Group valued his music catalog at $110.5 million in 2020, a number that’s likely only gone up. If West were to sell his back catalogs like an increasing number of his peers, the focus on fashion from the dual standpoint of economics and sheer attention could certainly sharpen.
No longer in debt, it’s quite possible West would be best served or happiest being no longer in contract.
In July 2022, Ye filed for a YZYSPLY trademark intended to be used to open retail stores. In a market that sees big companies like Nike moving closer and closer to direct-to-consumer models, it seems unlikely that the multi-hyphenate who’s long operated as his own brand wouldn’t want to do the same.
With this in mind, perhaps it will dawn on us at some point over the next few years that Yeezy Day has become every day.
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