Nearly a year ago, rap icon Kanye West was following in the footsteps of Jay-Z as Hip-Hop’s second billionaire. Today, Bloomberg reports that the rapper’s upcoming Yeezy deal with Gap could increase his billion-dollar net worth to $6.6 billion.
According to the outlet, West’s sneaker and apparel business with adidas AG and Gap Inc. — two of the world’s largest outfitters — is now valued at $3.2 billion to $4.7 billion by UBS Group AG, according to a private document reviewed by Bloomberg.
The bank document also reveals that the new Gap deal — which is set to hit stores this summer — could be worth up to $970 million of that total. Additionally, it shares details of an ideal alliance that aims to emulate the same level of success of the adidas partnership.
Last year, West — who maintains sole ownership and creative control of the Yeezy brand — signed a 10-year agreement with Gap to design and sell clothes for men, women and kids. The purpose behind the deal was to help revitalize Gap’s brand profile among younger customers, Bloomberg reports.
“Without some form of reinvention it will revert to previous struggles, which saw it lose shoppers, market share and sales,” Neil Saunders — an analyst at GlobalData Retail — remarked on Gap’s latest quarterly earnings after the retailer has been reportedly closing stores and investing money into e-commerce and activewear.
According to Bloomberg, West’s collaborative deal announced last June sent Gap shares up the most they’ve ever been in the last 40 years.
With the launch of the new line approaching, Gap CEO Sonia Syngal told Bloomberg earlier this month that “the entire Gap team are heads down and believe this to be a very big potential for us.”
The newly-reported figures indicate that Gap anticipates its upcoming Yeezy line to break $150 million in sales within its first full year in 2022, according to the bank document. Moreover, the document shares that Gap’s overarching goal is to become a billion-dollar revenue brand within eight years, with hopes of sales exceeding $1 billion as soon as 2023.
According to Bloomberg, terms of the new agreement with Gap detail that West will earn royalties on sales from the new line as well as stock warrants as the line hits sales targets, with the highest set at $700 million, a securities filing reports.
West’s fortune has continued to grow since his $1.3 billion net worth was reported last year. As reported by Bloomberg, sales for Yeezy’s adidas sneakers has increased by 31% to nearly $1.7 billion in annual revenue last year and netted out to roughly $191 million in royalties.
An unaudited balance sheet of West finances shared with Bloomberg by his lawyer revealed another $122 million in cash and stock and over $1.7 billion in other assets, which include a significant investment in Kim Kardashian’s Skims underwear label as well as West’s entire music catalog now worth $110.5 million, according to a 2020 valuation by Valentiem Group.
His largest asset to date are his adidas sneakers which consistently sell-out with consumers as UBS shares the business has been “growing at a staggering clip.”