Yeezy way out: How Kanye West, a college dropout, completed his lifetime quest to be a billionaire
Hip-hop star Kanye West finally has a title that perfectly suits his larger-than-life personality: He's now officially a billionaire. 'The College Dropout' rapper was listed by Forbes as a newly-crowned billionaire on Friday, April 25, after he submitted documents to prove that his net worth was well over a billion dollars. Although Kanye West may have claimed that he was worth well over $3 billion, Forbes scrutinized his holdings and valued him at about $1.3 billion in confirmed assets.
This comes due to the fact that Kanye West is the sole owner of the Yeezy brand, his fashion merchandise label that mostly deals with producing expensive, limited-edition sneakers in conjunction with the footwear giant Adidas. Kanye West has been trying to get a mention on the rarefied rich list for years, and Bloomberg confirmed that West's accountant, David Choi, had submitted financial documents to Forbes that proved his assets were well over the minimum thousand million-dollar mark. Choi submitted an unaudited balance sheet that valued the rapper’s net worth at $3.15 billion with over $200 million worth of his assets, including six separate properties and a music catalog that is valued at more than $110 million.
As of a few years ago, Kanye West was actually on the verge of bankruptcy. In 2015, West publicly stated that he had $16 million in debt, then tweeted in 2016 that he had $53 million in debt. But thankfully his in-demand sneakers and colorful personality have resulted in people banking on his Yeezy brand over the last few years, in a typical case of conspicuous consumption. He even overtook his mentor Jay-Z on Forbes' annual list of the World’s 20 Top-Earning Hip-Hop Stars recently.
According to the Bank of America's recent valuation of the Yeezy brand, the sneaker empire was well on its way to generating $1.3 billion of revenue last year, a 50% increase in its 2018 numbers. Kanye West would reportedly pocket $147 million in royalties thanks to the shoe brand's growing appeal with fashion-conscious sneakerheads.
Furthermore, “future royalties generated in the footwear category is estimated from $1.75 billion to $3 billion,” according to the bank’s analysis at the time. But it's worth noting that these figures were only accurate as of 2019. Due to the recent coronavirus pandemic, apparel and footwear sales in the United States have dropped by nearly 80% in April 2020, as compared to the April 2019 numbers. But Kanye's finances might not have taken as bad a knock as expected, considering his sneaker empire remains an online brand. Yeezy has no flagship retail stores and cuts operating costs by relying on its tie-up with the Adidas shoe company for logistics.
West had previously criticized Forbes for neglecting to put him on their billionaire list. At a recent New York Times' Dealbook Conference last November, he said Forbes "chose to call him a centi-millionaire,” despite having “showed them receipts.” He was further incensed in March 2020 when his sister-in-law, Kylie Jenner, was listed as a self-made billionaire for the second year in a row, and accused Forbes reporters of racial prejudice via text messages, claiming that he had been excluded due to the fact that he was a black man. But now that he's gone from bankrupt to billions, hopefully, all's well that ends well for the braggadocios entrepreneur.