Kanye West's golden arrow.

 -Himanshu Chaturvedi

 

The ones who are crazy enough to think that they can change the world  are the ones who actually do.

Quoted by the great Steve Jobs and reflected by the protagonist of our blog today. The American rapper Kanye West. 

No you must have heard about his crazy chronicles from interrupting Taylor Swift's winning speech to calling out his wife and mother in law. This man also announced his presidential run and announced Jesus Tok (Christian and pure version of Tik Tok)

But what if I told you, this man went from $53 Million in debt to be valued at $1.3 Billion. Crazy? 

But what if i told you that this man also made Nike lose a deal of a life time? Yeah! Crazier.  

In 2016, Kanye West asked Facebook CEO Mark Zuckerberg for a $1 billion investment in his “ideas”, as he was personally $53M in debt. So how did Kanye go from “broke” to billionaire, making more money than all but one celebrity in the world last year?

The answer is simple, his footwear and apparel company Yeezy.I'm sure you must have figured it out but please keep reading the blog. 

Nike. 

Now the process began with Nike's ego or ignorance, what ever you might judge them as by the end of this blog. 

In 2007, Kanye West found himself on a flight with Nike CEO Mark Parker. Sensing an opportunity, Kanye took out a sketchpad and started drawing shoe designs for Parker to review. By the time they landed, Kanye had Parker's word the two would design a shoe together.

Nike CEO Mark Parker put Kanye West and the legendary Tinker Hatfield, the original designer of the Air Jordan, in a room to collaborate.

Nike and Kanye started the footwear and apparel company named “Yeezy”, a shortened version of the nickname “Kanyeezy” given to him by Jay-Z in 2003. 

As sales of the Yeezy collection at Nike started to explode, Kanye felt underappreciated and approached Nike management with a proposal. he wanted to be identified and honored as a Nike Athlete (The premise or idea behind their advertisements is to honor the talent and stories of their athlete ambassadors). 

Since the Yeezy brand was showing results at par with Jordans, Kanye demanded a royalty upon ever shoe sold.  Nike declined the offer

Instead, they offered to put a small percentage towards a charity of his choice. This time, Kanye declined.

Nike and Kanye parted ways but then ones loss is always else's gain.  

 *Adidas enters the chat*

Adidas x Yeezy 

Adidas came calling - inviting Kanye and his representatives to the company headquarters in Germany.

 

Fearful that Nike might be able to sneak back in, Adidas made Kanye an offer nobody would refuse

The offer allowed Kanye to keep 100% ownership in Yeezy - making Adidas the exclusive producer, marketer, and distributer of all Yeezy shoes.

 

In addition, Kanye would be given a 15% royalty on all wholesale plus a yearly marketing fee. Considering Michael Jordan is rumored to get closer to a 5% royalty fee, the offer was unprecedented. 

 

Kanye accepted! 

 

next we know the collaboration did a reported $1.5 billion in sales during 2019, a 50% increase over the previous year. For the uninitiated, the Jordan brand does a reported $3 billion in annual sales for Nike. 

 

*Adidas x Yeezy enter the sneaker chat*

 

Kanye has always considered himself the creative child of god and I wouldn't disagree.  Why? because its hard to build something that would appeal the very elective millennial or Gen Y-Z. 

 

His shoes are expensive but something that sets the drip right. 

Every celebrity you know must have had a pair of these bad boys. talk about high level Influencer Marketing. 

What got the spike in brand value? Limited supply. 

After signing their historic deal, Kanye and Adidas deployed a strategic playbook to increase sales & overall brand value. 

 

Their model relied on a combination of exclusivity & scarcity. For example - they held limited "drops", routinely selling 40,000 pairs within minutes.

 

Not only did these sneakers create the hype or exclusiveness, It made people wooooork for it. 

 

The prices range between 1.5 Lakh to 3 Lakh + tax. INR.

 

Whats next for Mr West? 

The creative genius has signed a 10 year deal with GAP.

 

The Gap brand, which has flailed in recent years as it struggled with an identity crisis, has a new idea for how to revive its fortunes: Kanye West. - The New York Times.

Kanye West will be developing the new range of clothing for GAP in collaboration with Yeezy.

The deal will not include manufacturing/designing or sale of shoes *Adidas enters*  but just clothing. 

 

he has embarked on the journey with a mission "launch a successful product line"  considering how bad of  a state GAP is currently in. 

 

Liked the article? Leave a comment, Share it with your buds, see magic happen. 

 

We Instagram too:  SimplyBizns

We formalize on Linkedin as well: SimplyBizns.

Facebook? ermm.. nah. 

 

See you until next time.