It doesn't matter when you see this video; chances are Kanye West will be in
the news. And, we know he's taking over the headlines right now.
It's easy to see why.
The media has called him everything, from good
to bad, and let's not shy away from the truth. He loves exposure.
But, in this episode, we're not looking into that whole drama. Instead, we're diving into his business,
how Kanye's obsession led him to become a billionaire mogul in the fashion industry.
This is Company Forensics "The business of being Kanye"
In August 2019, Kanye West appeared on the cover of Forbes magazine, and the world was ecstatic.
Gracing the cover of Forbes magazine isn't easy.
But Kanye wasn't happy. Instead, he was actually quite angry.
After the article came out, Kanye went on a Twitter frenzy. He called
the editor a white supremacist who snubbed him and avoided the truth.
The reason for this tantrum?
The magazine didn't call him a billionaire.
Kanye had gone to great lengths to prove he was. He even showed
the magazine his financials (totaling $890 million, which isn't a billion).
His online rants were so aggressive that Twitter blocked him for twelve hours.
That's how obsessed he was with the word "billionaire."
Eventually, Forbes finally called Kanye West a billionaire less than a year later. Granted, it
hadn't come in the magazine's famous billionaire's list, but he was happy, to say the least.
But, if you've followed Kanye's career in both music and fashion,
you'd know that it has always been like this.
It seems his life has been a constant striving for approval. This chip on his shoulder goes back
to the early 2000s when he was a producer for Jay-Z, and he felt underappreciated.
He decided he'd become the greatest rapper out there from that moment. His next goal
was to be the best-dressed rapper, then a fashion mogul.
From a music perspective, 21 Grammys speak for themselves.
By the way, that tied him with none other than Jay-Z, placing him in hip-hop royalty.
And, sure, he has set fashion trends, but
replicating his musical success in the fashion industry wouldn’t be easy.
The failed ventures into fashion 2:50
His first shot at fashion came in 2005 when he announced that he'd release
his Pastelle Clothing line in 2006.
Many rappers had tried, and most failed to launch a viable clothing line. So,
it didn't come as a surprise.
He teased the world with some clothes, but that
2006 deadline came and went. Pastelle became more a myth than a reality.
Kanye tried to prove his worth in the fashion
world. He interned at Fendi in 2009 for $500 a month.
Sure, the media loved the news,
but he had nothing to show. After all the hype, both his ideas failed.
His Pastelle Clothing line died in 2009, and his internship at Fendi didn't fare better.
His men's leather jogging pants didn't spike interest.
So, add another snubbing to the list. But, Kanye kept on trying and to some success.
In 2009, after those two failures, he collaborated
with Nike to create what would become his mainstay product: the Air Yeezys.
This was the first time Nike partnered with a non–athlete,
and the recipe was a hit. They sold out almost immediately.
In 2011, he worked with Paris firm M/M, and in October of that year,
he premiered his own women's fashion brand: DW Kanye West.
He rushed a chaotic mix of products,
from sweatshirts to shoes, to showcase them at none other than the Paris Fashion Show.
It sucked.
The press destroyed the collection. DW was a failure.
So, it was back to the drawing board. Less than a year later, Kanye did another collection for the
Paris Fashion Show, where some commended him for improving, but not much else.
Mediocre fashion shows and one successful shoe model
weren't enough for Kanye, who wanted to build an empire.
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The fashion world wasn't making an exception for Kanye.
So, how did Kanye go from mediocrity to this?
Well, Kanye decided to try and make it through the one product that had worked: shoes.
His idea for the shoes was nothing short of ambitious. Well,
no. Not ambitious. We can't use that word.
Influences for his new line came from fascinating sources.
He continued making clothes under the Yeezy label
that didn't surprise the world. But the shoes did hit it big.
The hype, celebrity fame,
and the perfect example of supply and demand made the Yeezys footwear a hit.
After the Air Yeezys success, Kanye and Nike released the Air Yeezy 2 in 2012, and,
once again, they were a hit. A total of 10,000 pairs hit the market and sold out in seconds.
Not only that, but the resale market went crazy. The initial price was $245,
but some sold for more than $4000.
After four years of partnering with Nike, he shifted to Adidas, where they promised
him more creative freedom. There, he aimed to take the Yeezy brand to another level.
But, as you'll see later, this move would piss off the purists.
For the moment, Yeezys were the shoe to have.
Every time a new Yeezy came out, lines would form. People would wait for hours to have one.
At the same time, West was busy pushing the Yeezy clothing line as a whole.
He insisted on having shows all over NYC, and some sucked
Then, this happened on Twitter.
In early 2016, West tweeted and asked Mark Zuckerberg for $1 billion for his "ideas." Now,
that might seem crazy, but hey, it's Kanye.
He went on a Twitter rant, saying he was $53 million in debt
and that people didn't give money to real artists. Instead, they opened schools in Africa.
So, yes, he considered himself more important than those causes.
The world noticed and started wondering what the hell was going on whit this, whit his head
After all, Yeezys were a hit. People were camping out to buy a pair.
But Yeezys were one of the many fashion ideas that Kanye had. And most of them had failed. So word
got out that, to make it big, Kanye had invested more than $16 million into his fashion lines.
Plus, there were rumors of other "investments."
So, in his efforts to become an icon, Kanye was $53 million
in debt. It turns out that the Yeezys weren't saving him.
To draw attention, he tweeted to Zuckerberg,
who, by the way, doesn't have a verified account on Twitter.
Then, a miracle happened. Kim Kardashian, his wife at the time, cashed in one some
royalties and transferred $53 million to a joint account.
But, let's not say that Kim saved Kanye
But she did.
So, now free of debt, Kanye would work on expanding his shoe empire.
There were now more shoes coming in more frequently, and this caused the hype to go down.
The media wasn't loving the new models. Most of them were the same design in different colors,
and some even drew comparisons with old "dad" shoes.
Now, the resale magic had died.
But, Kanye had always insisted that he wanted more and more people to have the shoes. So,
this meant larger drops, which dropped the resale value. After all, that's going mainstream.
And, in the end, for Kanye and Adidas, that's fine.
Now, what's clear is that Kanye
was $53 million in debt. Whether Kim paid for it or not is another discussion.
We can say that, by 2019, Yeezy was no longer
this enigmatic brand that was struggling to define itself.
The total opposite: it was now generating $150 million a year. And, not only that,
the partnership with Adidas was unlike anything we'd ever seen.
First of all, Yeezy is entirely Kanye's. He owns 100% of the
branding and shares a commercial tie with Adidas until 2025, at the least.
Plus, he gets 15% of the wholesale price; that's ludicrous.
Even including expenses, according to Forbes, this would be about 11%.
That's more than double what Michael Jordan gets for his agreement with Nike.
Yeezys have become a shoe icon. And, yes, some people love them, and others hate them,
but as a brand, it makes perfect sense for Adidas and Kanye to put out more of them.
When Kanye partnered with GAP in 2021,
the first product launch was immediately successful and sold out in minutes.
So, now, the job is making a brand that can withstand the test of time. Take a look at
the Adidas Superstar, the Converse Chuck Taylors, and the Air Jordans.
These icons have taken decades to establish themselves,
and that's what Kanye and Adidas have to do now.
With the Yeezy brand's success, including the shoes and the GAP line, Kanye is now a
billionaire. That was his obsession for years, and it's now become a reality.
Though, in typical Kanye fashion, there's a lot of debate on how much money he has.
But shoes aren't the only thing he has done.
He's tried to have fast-food chains and partnered with Jay-Z
and other big names to create an elitist, niche streaming service.
Then, there are his forays into politics. He did try to run for president and has
said that he will have created so many jobs by 2024 that he will run again.
There's also that time when he,
a multimillionaire, asked for stimulus packages during the Covid pandemic.
The media blasted him for living such a lavish
lifestyle and daring to ask for money. But, friends are friends.
And, let's not forget about his STEM player and how the world loves mocking him for this
crazy idea that, if you want to listen to an album, you have to buy an exclusive $200 device.
In the end, that's the story with Kanye West. The world mocks him, and he keeps going.
Like a madman in a lab, he has an endless line of ideas. Some work, and some don't.
And, right there is the problem.
While Yeezy accounts for most of his wealth, it doesn’t account for most of his attention span.