Kanye Westʼs secret to building a

footwear empire to compete with

Nike
Mary Hanbury Apr. 26, 2018, 2305 PM

Kanye West has partnered with Adidas since 2015.

Jonathan Leibson/Getty Images

Kanye West has been on a Twitter

rampage this week coming out in
support of Trump and making
announcements about the success of
his footwear and apparel brand
Yeezy.

Analysts say that the statements he

made about the growth of his brand
may be overblown.

Despite this, Yeezy is now considered

to be one of the most influential
sneaker brands.

Kanye West has been on a Trump-style

Twitter rampage this week coming out in
support of the President, posting photos of
himself in a "Make America Great Again"
baseball cap, and waxing lyrical about his
footwear and apparel brand Yeezy.

The Yeezy brand, which sells apparel and

sneakers created in collaboration with
Adidas, is facing a backlash online with
customers threatening to burn or sell their
Yeezy sneakers and celebrities including
Rihanna and Drake reportedly have stopped
following West on Twitter.

West's announcements about his brand's

success have also gained attention after he
claimed it is on track to "hit a billion dollars"
this year and will be hiring 160 people.

"It is the 2nd fastest growing company in

history," West wrote. "It is a unicorn on its
way to becoming a decacorn," he said,
using Silicon Valley buzz words which
describe a business that is valued over $1
billion and over $10 billion.

West followed his announcement with a

series of tweets, claiming that he is
"currently the single highest paid person in
footwear" and makes more money on shoes
than Michael Jordan.

He then posted: "There's been a lot of fake

news so I just wanted to give you the facts.
Yeezy will become the biggest apparel
company in human history."

Yeezy's real value is hard to determine

As the company does not release sales

data and it is not split out by Adidas, it's
almost impossible to determine whether his
statements are correct. Adidas would not
provide any financial specifics related to
Yeezy to Business Insider.

GQ's Cam Wolf spoke to Cowen retail

analyst John Kernan, who covers Adidas, to
find out whether any of West's claims hold
true.

"I find it hard to believe it's generating over

a billion in sales," Kernan told GQ.

Wolf explained that Yeezy would need to

pull in $3 billion in sales annually to reach
this number, which works out as almost 8%
of Adidas' entire global business.

According to Kernan, it's also unlikely that

West is making more than Michael Jordan
has with Nike.

"I'm not sure what the economics are for

[Jordan] at Nike, and I don't know what
Kanye's economics are but it's hard for me
to believe it's anywhere near what Nike's on
the hook for with Jordan," he told GQ.

Yeezy Boost 350. Facebook/Adidas Yeezy

Yeezy is an influential sneaker brand

These potentially exaggerated claims

shouldn't diminish the success of the
brand, however. This week, it was ranked in
ninth place in a list of the "hottest brands"
created by the Business of Fashion and
fashion search platform Lyst.

"Streetwear insiders believe the brand

could enter the Top 3 Hottest Brands
before the year is out," the index noted.

"Sneakers remain the most searched for

Yeezy item worldwide. This quarter the
Yeezy Blush 500 and the Yeezy Boost 700
were the most wanted styles" during the
first quarter of 2018, Katy Lubin, a
communications director at Lyst, told
Business Insider.

West has also been credited with paving

the way for some major trends in the
sneaker industry. GQ deemed its Boost 350
shoes, which were first released in 2015, as
the most influential sneakers of 2016 and
claimed that smaller labels such as Allbirds
seemed to take influence from them.

West has also been at the forefront of the

ugly fashion trend, along with Balenciaga
and Louis Vuitton. He's outsmarted industry
leaders such as Adidas who have been slow
to jump on this movement, announcing the
launch of its new "dad shoe" this week.
This is expected to hit stores in June 2017. ​

Kanye is a marketing genius

One of West's biggest strengths is his

method of rolling out products in limited
numbers. These build hype and sell out
quickly. One hour after the Boost 350
sneakers went on sale for $200, for
example, they were sold out in stores and
online.

"Kanye is a master of social media hype.

He's used his personality, plus smart
scarcity and exclusivity models to build a
cult brand," Lubin said.

Because of this, his sneakers have also

become an expensive commodity on the
resale market. In 2015, the Yeezy Boost 750
in Triple Black was the highest selling
sneaker in resale, selling on eBay for an
average of $1,876, according to a survey
done by fashion and sneaker blog High
Snobiety and Campless, a database for
sneaker resellers. In fact, Kanye and Adidas'
Yeezy collection accounted for six of the
top 20 most valuable sneaker spots.

Another of West's assets is his unique

marketing strategy.

West's wife Kim Kardashian West was at

the center of his most recent Yeezy 6
season campaign - she stepped out in the
new collection and was photographed by
the press.

Kanye West then recruited a series of social

media influencers and celebrity Paris Hilton
to dress in the same outfits as Kim and
recreate the paparazzi images of her. These
were then posted them to their own social
media pages.

According to Lyst, the hype from his social

media campaign provoked a 45% spike in
search demand for Yeezy on its platform in
the week after it appeared versus the week
before.

"The Yeezy team is embedded into culture -

art as well as pop - and are not afraid to
play with those codes in their marketing
efforts," Quynh Mai, Founder of Moving
Image & Content, the digital agency behind
the official films created for the launch of
his Season 1, 2, and 3 collections, told
Business Insider.

This direct to consumer advertising tactic

not only saves marketing dollars, but is also
a way to bring his products to the masses.

"Yeezy's marketing approach is effective

because it balances exclusivity (art,
celebrities) alongside mass (Instagram,
movie theaters). His campaigns are creative
artistic expressions while his distribution
strategies are mass," Mai said.

SEE ALSO: Kanye West says his shoe

brand is hiring 160 people this year
and will 'hit a billion dollars' »

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