Collectors are raising prices for Yeezy shoes after Adidas parted ways with Kanye West

(Bloomberg) — The sneaker resale market collapsed earlier this year and now faces a new threat: You’re falling.

“The implosion of the Yeezy brand will be a significant blow to the market,” said John Kernan, an analyst at Cowen who estimated that along with Nike, Yeezy makes up about 90% of the $4 billion sneaker resale industry.

“The collapse of the Yeezy brand will be a significant blow to the market”said John Kernan, an analyst at Cowen who estimated that Yeezy along with Nike make up about 90% of the $4 billion sneaker resale industry. “They’re going to have to go through a real evolution without Yeezy products.”

On Tuesday, Adidas AG cut ties with Ye, the rapper formerly known as Kanye West, and his Yeezy brand after he set off a wave of offensive comments. The move ends a seven-year partnership that helped turn the sporting goods giant around, transforming sneaker collecting from a hobby into a booming industry that includes digital platforms like StockX and GOAT, valued at around $4,000 million, according to researcher PitchBook.

Over the past day, Yeezy prices have risen about 10%, while trade volume has nearly doubled, according to WANTD, which tracks resale sales. Since Adidas ended its deal with Yeezy, sneaker investors have taken “significant positions,” with some buying as many as 300 pairs, according to WANTD CEO Rick Nariani.

It could be a sign that the negativity surrounding Ye, who also ended his business relationship with Gap and Balenciaga, is being countered the expectation that Yeezy shoes will never be produced again. Adidas told analysts it would sell its remaining inventory. However, the company left open the possibility of future production, saying it owns all rights to Yeezy’s design.

Kanye West and 2018 (Image: Getty)

Kanye West and 2018 (Image: Getty)

“This is expected to create some shortages that will push up prices, regardless of the negative connotations,” said Brendan Dunne, general manager of sneaker website Sole Collector, part of Complex Networks.

That’s the bet made by Teddy Deas, a 26-year-old business analyst from Colorado.

“I plan to buy some exclusives and hold onto them to see if the value goes up,” said Deas, who has already spent $1,500 on Yeezys.

Aaron Gesquiere, who spent up to $5,000 on sneakers, remained optimistic about the rapper. The 32-year-old, who works in insurance and lives in Detroit, plans to boycott Adidas, which took a lump sum of about $250 million after terminating its contract with Ye.

“The price on the secondary market is going to go up,” said Gesquiere, who bought a pair of Yeezys on eBay last week for $235. “I will never buy direct from Adidas again.”

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Like other alternative asset classes, from meme stocks to cryptocurrencies, the limited-edition sneaker market has soared during the pandemic thanks to dealers and collectors counting on government stimulus money. At the peak of the 2021 craze, one seller made up to $20,000 by selling 600 pairs of Yeezys within hours of their release.

Even before the pandemic, Ye, one of the world’s most famous stars, created excitement in the resale market and attracted many new collectors, said Matt Halfhill, founder of Nice Kicks. His exit could send a signal to resellers and buyers to stay away.

Original note: Yeezy sneaker collectors raise prices after Ye-Adidas split

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