The 'Kanye Effect' is the hottest debate in the sneaker world

Mon, Jul 3, 2017, 5:03 AM

Nike shares saw a bump last week after the company beat expectations on its fourth-quarter earnings report and also announced it would begin selling merchandise on Amazon for the first time.

But the talk of the sneaker world is still Adidas. And sneaker collectors and obsessives insist that the biggest reason is Kanye West.

The German sportswear giant has made major market-share gains in the last year in US athletic footwear.

From May 2016 to May 2017, according to data from research firm NPD Group, Adidas’s US sneaker share nearly doubled, from 6.3% to 11.3%. In the same 12 months, Nike’s share dipped slightly, as did Jordan Brand’s.

So, a question arises: is it all thanks to Kanye?

kanye west — Kanye West, who signed a long-term design deal with Adidas in 2014. (Getty Images)

Adidas first signed a design partnership with West in 2014, stealing him away from Nike. In February 2015, it released its first Kanye-designed sneaker, the Yeezy Boost 750, retailing at $350. It put out only 9,000 pairs. Since then, it has only ever released Yeezy shoes in extremely limited supply.

Because of that, there’s no real sense of sales numbers for Adidas Yeezy products. And because of that (and other arguments), one of the most prominent sneaker industry analysts says that West hasn’t done much at all to boost Adidas.

Matt Powell of NPD Group surely appears more in the media, and is more vocal on Twitter, than any of the other analysts that closely cover Nike, Adidas, Under Armour, and the other major publicly-traded sports apparel companies. And Powell has been unequivocal about West and Adidas: no impact. “They paid $10 million for nothing,” he tweeted in December.

That’s heresy to the sneakerheads who are certain that the return of Adidas is thanks to what they call the “Kanye Effect” or “Yeezy Effect.” Josh Luber, founder of the sneaker resale site StockX, told High Snobiety, “It is the success of the Adidas partnership with Kanye West that is contributing to this positive story.” Alan Vinogradov, who runs the New York City sneaker convention SneakerCon, says that in the past, almost every attendee at SneakerCon wore Air Jordans. Last year, instead, he noticed more Adidas sneakers than ever. He ascribes it to West. Footwear News has written that the Yeezy line “has boosted the resale market,” and the TV network Fuse ran a digital miniseries on the Kanye Effect.

Powell’s reasons for denying the Kanye Effect are mainly: there’s extremely limited supply, so there’s no sales data to directly suggest West’s role in the Adidas comeback; and Adidas did not begin to seriously claw back US market share until late 2015, when West had already been with the brand for nearly two years.

“If he had the kind of influence people want to bestow on him,” Powell says, “why did it take two years?” (As an example of a celebrity sports apparel collaboration that did take hold immediately, he points to Rihanna and Puma.)

The main cause of the comeback, Powell says, is something simpler and more concrete: product. Adidas has made great gains with its Boost line of sneaker technology (widely praised for their comfort), along with Flux and NMDs. it has also refreshed its most classic shoes, the Superstars and Stan Smiths, which fall under its Originals division—the part of its sneaker business that has grown the most in the past year.

US athletic footwear market share, May 2016 vs May 2017

Those in the sneaker world (many of whom love to reply angrily to Powell on Twitter, and he in turn engages back) say that it’s short-sighted to measure West’s helping hand only based on the West shoes. “You can’t credit him only for selling Yeezys,” says Brian Quarles, creative director at the agency Revolution. West has been seen wearing other Adidas sneakers in puclic, not just his own, and that makes all Adidas shoes cool among hip-hop lovers and West fans. Indeed, Jonathan Komp, a sneaker analyst at Baird & Co., has pointed to a “halo effect” created by the Yeezys on designs like the NMDs.

The net effect of all this noise is that it’s difficult to argue that West’s influence on the popularity of Adidas has been zero. Yet that is Powell’s firm belief.

Regardless, Adidas must be convinced West is worth it: last year, it extended him to a much more comprehensive, long-term deal. So unless some unexpected drama occurs, Yeezy will be at Adidas for more years to come, and the argument will continue to rage.

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Daniel Roberts is the sports business writer at Yahoo Finance. Follow him on Twitter at @readDanwrite.

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