Although the co-founder of Facebook Inc. never accepted, West managed to do it himself: Bank of America Corp. valued the sneaker business alone at $3 billion last year, according to a document seen by Bloomberg. That was before the pandemic of COVID-19 devastated the fashion industry.
But West, the sole owner of the brand, is not deterred. He now seeks to bring the Yeezy name to other fields, such as architecture, hospitality and even urban design. He calls it the “next frontier of life for humanity.”
“This is all level 2,” West said of Yeezy’s evolution when contacted by phone at his ranch near Cody, Wyoming, where his family is experiencing the COVID-19 pandemic. It’s also one of the places where he’s considering building an entire city from scratch: Yeezy City.
“Time to go to level 3,” he said.
For now, though, the shoe is the engine that keeps the brand going. Yeezy was on track to generate $1.3 billion in shoe revenue in 2019, up 50% from the year before, according to Bank of America. West would earn $147 million in royalties from those sales.
Vogue Magazine calls the sneakers the “true heroines of the Yeezy empire.” They’re released in highly-hyped limited editions, with shoppers clamoring to grab a pair online before they’re all gone, usually within minutes. They often sell on the secondary market for several times the original price.
pink skins
West’s financial saga, revealed in pieces over the years through his tweets, letters and speeches, is complicated and predominantly marked by debt.
In 2015, the artist told BET that he made $16 million from Yeezy. The following year, he tweeted that his debt had ballooned to $53 million, and also announced the release of his seventh studio album, “The Life of Pablo,” in which he raps about the likelihood of dying broke and dressing his wife. son with pink fur
Alexandra Fletcher, a spokeswoman for Bank of America, confirmed the authenticity of the document reviewed by Bloomberg. Prepared in September, it has not been updated since the coronavirus pandemic began. The valuation of “future royalties generated in the footwear category is estimated to be between $1.75 billion and $3 billion,” according to the bank’s preliminary analysis.
Yeezy is by far West’s biggest asset. His personal accountant, David Choi, provided an unaudited balance sheet pegging the rapper’s net worth at $3.15 billion and listing more than $200 million in other assets. They include four homes in California, two in Hidden Hills, one in Thousand Oaks and one in Calabasas, as well as properties in Wyoming and his native Chicago, Choi said.
Taken separately, his entire catalog of music, from “The College Dropout” to “Jesus is King” and everything in between, is worth about $110.5 million, according to a Valentiam Group valuation.
creative control
The rapper is married to Kim Kardashian West. His wife’s sister, Kylie Jenner, became the world’s youngest billionaire last year after her cosmetics company entered into an exclusive partnership with Ulta Beauty Inc. Jenner, 22, later sold a majority stake in Kylie Cosmetics to Coty Inc. for $600 million.
West’s partnership with Adidas AG, which makes and distributes the shoes, is more of a profit-sharing deal than a typical licensing deal. You retain creative control over the design, while adidas is in charge of the realization and production. The agreement will end in 2026.
The fashion industry has struggled during the pandemic, hit by massive store closures and declining demand for non-essential items, which could hurt Yeezy’s business. In April, US sales at clothing, accessory and footwear retailers are expected to fall 79% from a year earlier, according to Forrester Research.
Even so, the brand has managed to avoid some of the most serious consequences, as it is sold almost entirely online and logistics is handled by Adidas. While concerns about consumer demand for discretionary goods will grow the longer the health crisis persists, Yeezy’s footwear continues to sell, according to a person familiar with the business.
Adidas declined to comment.
