Adidas has decided to reduce the supply of YEEZY and maintain its limited quantity.
Editor’s note: This article comes from the WeChat public account “ Sports Big Business ” (ID: sportsmoney), author Tan Liwen.
When Kanye West discovered that Forbes ’latest 34th Global Billionaires List did not have its own name, he was angry again Too.
Kanye texted to Forbes magazine, “Do you know what you are doing? You are teasing me, and I will not accept this (not on the list) results.” Kanye boarded the summer of The cover of Forbes, but this did not make him feel satisfied from the bottom of his heart. Because he didn’t recognize his identity as a billionaire for Forbes, he was a bit grudged.
One year later, Kanye finally made up his mind to pull out the “thorn” in his heart and prove to Forbes that he is a real billionaire. In April 2020, Kanye ordered to his team to provide Kanye, Inc. ’s true financial report to Forbes. After accounting, Forbes announced that Kanye was an out-and-out billionaire.
Forbes recognizes Kanye as a billionaire
It was not long before Forbes announced that Kanye became a billionaire. On April 28, German sports giant AdiDas released its financial report for the first quarter of 2020. The financial report shows that global net income fell by 97% to 20 million euros. In 2019, this figure was 631 million euros. Compared with the dismal financial report, the billionaire is slightly ironic. Of course, most of this loss is affected by the new crown epidemic.
However, YEEZY showed a decline after the peak in 2018, which also became the “invisible bomb” operated by Adidas. Consumption growth slowed, consumers ridiculed that the shoes were palettes, the shoes were aesthetically fatigued, and they kept replenishing “just bad money.” This can’t help but make people rethink, how long can the YEEZY empire created by Kanye and Adidas last?
Kanye “transferred” from Nike Adidas, and the YEEZY empire jointly created to bring both parties to the peak of their careers: Kanye got rid of $ 53 million in debt and became a billionaire; the first pair of YEEZY in 2015 After the sale, Adidas stock prices continue to refresh the highest value. Judging from the current performance, the cooperation between Kanye and Adidas has enabled both parties to reap the benefits of fame and fortune, and is a win-win cooperation.
Adidas ’share price has hit record highs
Kanye owns YEEZY 100 % Share, valuation exceeds US $ 3 billion
In 2014, Kanye brought his own YEEZY brand “transfer” Adidas, which brought traffic to Adidas and brought a lot of controversy. . Many consumers and people in the industry are skeptical whether YEEZY can reach the height of Nike. From the perspective of sales alone, this “transfer” is undoubtedly successful.
Since the launch of the first YEEZY sneaker in 2015, it has gained a lot with its limited edition, topic, and novel featuresBig wave consumers. In the third quarter of 2018, the YEEZY series reached its peak. Adidas CEO Caspar Rothde previously stated that the third quarter of 2018 was the best quarter for YEEZY sales to date. Although the sales performance was the best quarter in history, Adidas did not release specific financial data for the YEEZY product line. In 2019, the performance of the YEEZY series is still strong. According to the recent dialogue and internal documents between Forbes Magazine and Kanye, the final revenue of the YEEZY series in 2019 is close to $ 1.3 billion.
The great success of the YEEZY series also enabled Kanye’s personal career to take off. According to the agreement signed by both parties in 2014, he can get about 15% of royalties from YEEZY income from Adidas. After deducting some expenses, Kanye can still get an 11% share of income. According to the 1.3 billion US dollars of revenue from the Adidas YEEZY series in 2019, Kanye has relied on YEEZY for more than 140 million US dollars in the past year.
Kanye owns 100% of the YEEZY brand
Kanye ’s ability to obtain the billionaire status recognized by Forbes for $ 1.3 billion is largely due to the YEEZY series. According to the documents provided by Kanye to Forbes, Kanye’s main property comes from 100% shares of its brand YEEZY, followed by US $ 90 million in record companies and music copyrights, US $ 81 million in real estate, US $ 21 million in land, and US $ 17 million. Dollar cash, etc., is about $ 300 million more than Jay-Z, another American hip-hop singer who is close behind.
According to Bank of America’s 2019 documents revealed by Bloomberg, the valuation of the YEEZY brand is about $ 3 billion. When Forbes acknowledged Kanye ’s $ 1.3 billion in assets, Kanye complained to Forbes, “You are wrong about my net worth. My net worth is well over $ 3 billion”
Return to the limited route, Adi changes YEEZY ’s sales strategy
Although the YEEZY series made Adidas’ price-earnings ratio in the US sports shoes market once more than another giant Nike (from May 2016 to 2017), but the market has recently felt weak consumption for the YEEZY series. This also allowed Adidas to reconsider Yeezy’s sales strategy.
Adidas’ third fiscal quarter 2019 report shows that footwear sales only increased by 1% year-on-year, compared with an increase of 8% in the same period last year. E-commerce business sales growth was only 14%, compared with 76% in the same period in 2018 and 37% in the second fiscal quarter of fiscal 2019, the growth rate slowed significantly. Some analysts believe that the weak performance of the YEEZY series is part of the reason for the slowdown in footwear and e-commerce sales growth. What makes Adidas even more vigilant is that the supply of YEEZY series reached a record high in the quarter, but the market did not pay. At the investor meeting after the financial report, Rothde revealed that the YEEZY series’ sales in the third quarter failed to achieve growth.
Kan Yeh ’s personal YEEZY inventory
Therefore, Adidas is considering returning YEEZY to the limited route. Scarcity and topicality have become important methods for sneaker marketing in recent years. Because of this, sneakers have truly become a trend business. In the early days of the YEEZY series, due to the low output and the attributes of Kanye’s own topic, YEEZY has gained huge traffic and attention after the sale. Due to the shortage of goods and the benefits brought by the topic, Adidas has also turned into real sales.
2017 and 2018 are the pinnacle of the YEEZY series and Adidas. In 2017, Adidas sales increased by 15% year-on-year to 21.218 billion euros, entering the 20 billion euro club for the first time, and net profit increased by 7.9% year-on-year to 1.1 billion euros; in 2018, Adidas sales increased by 8% year-on-year to 21.9 billion euros. Net profit increased by 19.5% year-on-year to 1.7 billion euros.
In Kanye yelled “Everyone has YFrom the moment of “EEZY wear”, Yeezy’s scarcity is greatly reduced. The most classic one is the YEEZY BOOST 350V2 white ice cream color scheme. Adidas has replenishment multiple times, and the total sales volume exceeds one million pairs.
From the perspective of consumer demand, consumers will continually pursue new things. For the aesthetic fatigue of YEEZY series, Adidas is naturally also expected. Before the new YEEZY breakpoint was created, Adidas could only increase production to meet the needs of consumers who had not previously bought YEEZY. As a result, the increase in production broke the “hedgehog effect” of the previous YEEZY series. That is, Adidas, which is simply seeking high-speed growth, has not grasped the demand between YEEZY and consumers.
Some products of YEEZY series
In November 2019, Adidas CEO Roth said in a conference call: “Compared with the first half of the year, the third quarter is the largest quarter of YEEZY supply, but the business has no signs of growth.” Roth also said , Adidas has decided to reduce the supply of YEEZY and maintain its limit. Perhaps YEEZY, which has returned to the limited route, is more popular with consumers.
YEEZY professional basketball shoes, Can shake Nike’s status?
In addition to returning to the limited route, the strategy of entering professional basketball shoes may allow the glory of YEEZY to continue. YEEZY’s first professional basketball shoe “Quantum” was finally unveiled and released during the NBA All-Star in February 2020. As the first professional basketball shoe of the YEEZY series positioned in actual combat, it has high expectations from consumers from the moment it is exposed, as it is both trendy and sporty.
YEEZY, who is good at hunger marketing, naturally needs to incorporate scarcity and topicality into it. at 2During the 020 Chicago All-Star, Kanye led the YEEZY team to give 1,000 pairs of shoes to the people in their hometown in the form of armored vehicles (Chicago is Kanye ’s ancestral home). But the premise of giving is that the fans will wear the shoes for exchange. Many fans wearing Nike limited shoes don’t hesitate to exchange the shoes on their feet. The classic scene of consumers swapping Nike for Adi has also successfully made it on the hot search list of American social media.
YEEZY ’s first basketball shoes during the 2020 Chicago All-Star Show
In addition to these 1,000 pairs of on-site basketball shoes, the remaining 4,000 pairs of shoes are only available on YEEZY designated channels. The first public sale of YEEZY’s first professional basketball shoe has enough topicality and scarcity, and has also satiated consumers’ appetite.
In the NBA’s sneaker camp, Adidas has always been the role of the second millennium. American shoe media Baller Shoes DB has released the distribution ratio of NBA players’ shoe brands in the 2018-19 season, of which Nike is far ahead. The top ranked Nike and the third Air Jordan were 62.6% and 9.4% respectively, with a ratio exceeding 70%, while the second-ranked Adidas was only 15.8%. To a certain extent, it also reflects that in the professional basketball shoe consumer market, Adidas is far away from Nike.
Adidas signed player Ingram wears YEEZY basketball shoes and asks Kanjesso to sign
Relying on Lillard, Harden,Ross and other big-name stars, Adidas has not been able to shake Nike’s position in professional basketball shoes. Now that Adidas wants to challenge Nike, it seems that there is only YEEZY hope. The topicality can make YEEZY sneakers gain enough attention, thereby driving product sales. But if YEEZY wants to continue to put the limited sales strategy on basketball shoes, the results may not be satisfactory.
As for whether it can challenge Nike’s dominance of basketball shoes, from the current market situation, it is quite difficult for Adidas to shake the status of the former. Regardless of the size of the spokesperson, the classification of sneakers, and consumer evaluation, Adidas is at a disadvantage. The only thing Adidas can do is the trend attribute that YEEZY comes with. If you want to share a piece of soup in Nike’s hands, Adidas must play this “trend card”.
YEEZY and Jordan are undoubtedly the two major personal brands in the shoe industry. Compared with the Jordan brand founded in 1985, the YEEZY brand established in 2014 is only a “rookie”, but the “rookie” is constantly achieving the goal of catching up. In fiscal 2019, Nike Jordan’s total sales were $ 3.14 billion; in fiscal 2019, Adidas YEEZY’s total sales were approximately $ 1.3 billion. For the YEEZY brand, which only released its first sneakers in 2015, the annual sales of the record highs in the past six years have indeed given “cainiao” the capital to challenge the “giant”. The battle between the two giants, virtue and virtue, will also become an important aspect of the shoe market in the next few years.
Although the YEEZY series made Adidas’ price-earnings ratio in the US sports shoes market once more than another giant Nike (from May 2016 to 2017), but the market has recently felt weak consumption for the YEEZY series. This also allowed Adidas to reconsider Yeezy’s sales strategy.
Adidas’ third fiscal quarter 2019 report shows that footwear sales only increased by 1% year-on-year, compared with an increase of 8% in the same period last year. E-commerce business sales growth was only 14%, compared with 76% in the same period in 2018 and 37% in the second fiscal quarter of fiscal 2019, the growth rate slowed significantly. Some analysts believe that the weak performance of the YEEZY series is part of the reason for the slowdown in footwear and e-commerce sales growth. What makes Adidas even more vigilant is that the supply of YEEZY series reached a record high in the quarter, but the market did not pay. At the investor meeting after the financial report, Rothde revealed that the YEEZY series’ sales in the third quarter failed to achieve growth.
Kan Yeh ’s personal YEEZY inventory
Therefore, Adidas is considering returning YEEZY to the limited route. Scarcity and topicality have become important methods for sneaker marketing in recent years. Because of this, sneakers have truly become a trend business. In the early days of the YEEZY series, due to the low output and the attributes of Kanye’s own topic, YEEZY has gained huge traffic and attention after the sale. Due to the shortage of goods and the benefits brought by the topic, Adidas has also turned into real sales.
2017 and 2018 are the pinnacle of the YEEZY series and Adidas. In 2017, Adidas sales increased by 15% year-on-year to 21.218 billion euros, entering the 20 billion euro club for the first time, and net profit increased by 7.9% year-on-year to 1.1 billion euros; in 2018, Adidas sales increased by 8% year-on-year to 21.9 billion euros. Net profit increased by 19.5% year-on-year to 1.7 billion euros.
In Kanye yelled “Everyone has YFrom the moment of “EEZY wear”, Yeezy’s scarcity is greatly reduced. The most classic one is the YEEZY BOOST 350V2 white ice cream color scheme. Adidas has replenishment multiple times, and the total sales volume exceeds one million pairs.
From the perspective of consumer demand, consumers will continually pursue new things. For the aesthetic fatigue of YEEZY series, Adidas is naturally also expected. Before the new YEEZY breakpoint was created, Adidas could only increase production to meet the needs of consumers who had not previously bought YEEZY. As a result, the increase in production broke the “hedgehog effect” of the previous YEEZY series. That is, Adidas, which is simply seeking high-speed growth, has not grasped the demand between YEEZY and consumers.
Some products of YEEZY series
In November 2019, Adidas CEO Roth said in a conference call: “Compared with the first half of the year, the third quarter is the largest quarter of YEEZY supply, but the business has no signs of growth.” Roth also said , Adidas has decided to reduce the supply of YEEZY and maintain its limit. Perhaps YEEZY, which has returned to the limited route, is more popular with consumers.
YEEZY professional basketball shoes, Can shake Nike’s status?
In addition to returning to the limited route, the strategy of entering professional basketball shoes may allow the glory of YEEZY to continue. YEEZY’s first professional basketball shoe “Quantum” was finally unveiled and released during the NBA All-Star in February 2020. As the first professional basketball shoe of the YEEZY series positioned in actual combat, it has high expectations from consumers from the moment it is exposed, as it is both trendy and sporty.
YEEZY, who is good at hunger marketing, naturally needs to incorporate scarcity and topicality into it. at 2During the 020 Chicago All-Star, Kanye led the YEEZY team to give 1,000 pairs of shoes to the people in their hometown in the form of armored vehicles (Chicago is Kanye ’s ancestral home). But the premise of giving is that the fans will wear the shoes for exchange. Many fans wearing Nike limited shoes don’t hesitate to exchange the shoes on their feet. The classic scene of consumers swapping Nike for Adi has also successfully made it on the hot search list of American social media.
YEEZY ’s first basketball shoes during the 2020 Chicago All-Star Show
In addition to these 1,000 pairs of on-site basketball shoes, the remaining 4,000 pairs of shoes are only available on YEEZY designated channels. The first public sale of YEEZY’s first professional basketball shoe has enough topicality and scarcity, and has also satiated consumers’ appetite.
In the NBA’s sneaker camp, Adidas has always been the role of the second millennium. American shoe media Baller Shoes DB has released the distribution ratio of NBA players’ shoe brands in the 2018-19 season, of which Nike is far ahead. The top ranked Nike and the third Air Jordan were 62.6% and 9.4% respectively, with a ratio exceeding 70%, while the second-ranked Adidas was only 15.8%. To a certain extent, it also reflects that in the professional basketball shoe consumer market, Adidas is far away from Nike.
Adidas signed player Ingram wears YEEZY basketball shoes and asks Kanjesso to sign
Relying on Lillard, Harden,Ross and other big-name stars, Adidas has not been able to shake Nike’s position in professional basketball shoes. Now that Adidas wants to challenge Nike, it seems that there is only YEEZY hope. The topicality can make YEEZY sneakers gain enough attention, thereby driving product sales. But if YEEZY wants to continue to put the limited sales strategy on basketball shoes, the results may not be satisfactory.
As for whether it can challenge Nike’s dominance of basketball shoes, from the current market situation, it is quite difficult for Adidas to shake the status of the former. Regardless of the size of the spokesperson, the classification of sneakers, and consumer evaluation, Adidas is at a disadvantage. The only thing Adidas can do is the trend attribute that YEEZY comes with. If you want to share a piece of soup in Nike’s hands, Adidas must play this “trend card”.
YEEZY and Jordan are undoubtedly the two major personal brands in the shoe industry. Compared with the Jordan brand founded in 1985, the YEEZY brand established in 2014 is only a “rookie”, but the “rookie” is constantly achieving the goal of catching up. In fiscal 2019, Nike Jordan’s total sales were $ 3.14 billion; in fiscal 2019, Adidas YEEZY’s total sales were approximately $ 1.3 billion. For the YEEZY brand, which only released its first sneakers in 2015, the annual sales of the record highs in the past six years have indeed given “cainiao” the capital to challenge the “giant”. The battle between the two giants, virtue and virtue, will also become an important aspect of the shoe market in the next few years.