Recently, Kanye West has made a series of statements and actions, which from full on racism to potential threats with ex wife to just flat out insanity, it’s put Adidas in a situation of questioning their deal with him.
In June of 2020, Gap signed a deal with Kanye West to move the Adidas brand past just sneakers, doing an entire apparel line of jackets, shirts, pants and dress shoes.
Gap had the stock price go up 42% the week the deal was announced and Gap was projected to do one billion dollars in sales just in the first year off it. Gap made 16.7 billion dollars in 2021, meaning they expected Kanye to grow sales by 6% just in the first year.
In September of this year, Kanye West pulled the deal, claiming Gap broke contract, not properly branding products with the “Yeezy” name and saying they didn’t plan on starting retail stores for him exclusively.
That deal failed, but Kanye West has since claimed he found financing and partners to do Yeezy apparel outside of Gap.
Kobe Bryant signed with Adidas in 1996, but in 2003 switched to Nike. Before he passed away, Kobe Bryant rumored to be making plans to announce he’d be forming his own sneaker company, when his Nike deal expired. Which seems correct, seeing how Kobe’s estate pulled from Nike when the contract expired, holding out for about a year, until a renewal deal hit.
Kanye West and Adidas has been a long process, with the original designs being done as early as 2006, 2013 was when the contract signed and the release happened in 2015.
Before that though, Kanye West tried to start his own company in fashion, launching Pastelle, which went under in 2009. Problem was heavier costs in fashion over what he projected and was part of the reason Kanye West had a reported debt of 50 million in 2016.
The partnerships did better, but now Kanye West probably could just manufacture his own sneakers.
Nike has a market cap of 137 billion dollars, with revenue for 2021 being 44 billion dollars.
If Kanye West held Yeezy sales at 1.7 billion without Nike and went public on that valuation, the brand would be worth over 5 billion dollars. Not including the apparel business and other areas it can go.
Kanye West owns the Yeezy brand, but is locked into an exclusive with Adidas. If he acts crazy, sexist, racist and all these other things, Adidas could terminate the contract, where at no cost to Kanye, he can just manufacture sneakers Adidas free.
Is this what he’s actually thinking?
Honestly, I think it’s partly in his mind. He’s said and done crazy things for 20 years getting public forgiveness every single time. Even with his new stunts, he’s not angered the core audience of people who buy his products, while angering Adidas, their other partners and many more people.
This strangely enough might be corporate planning and not an outright nervous breakdown.
