Photos: YEEZY MAFIA/Instagram
On Friday, Gap’s shares vaulted 19 percent after the retailer announced a partnership with Kanye West to produce the YEEZY Gap apparel collection, set to arrive in Gap stores and Gap.com in 2021.
Mr. West is a sometimes-controversial rapper whose marriage to reality star Kim Kardashian constantly lands him on the gossip pages. He is also a fashion designer whose YEEZY collaboration with Adidas has been a wild success.
The Adidas collaboration includes premium-priced apparel, although it’s mostly known for sneakers that regularly sell out at prices ranging from $200 to over $1,000. In April, the Yeezy brand was valued at $2.9 billion.
YEEZY Gap promises to deliver “modern, elevated basics for men, women and kids at accessible price points.” The collection will be produced under Mr. West’s creative direction and his vision “will extend to unique YEEZY Gap expressions in Gap stores and digital channels over time,” according to Gap’s news release.
Going beyond typical partnerships, Mr. West will receive warrants to acquire up to 8.5 million Gap shares or 2.3 percent of current outstanding shares in addition to royalties. The warrants vest as the Yeezy line hits certain sales targets. The New York Times reports that Gap hopes sales of the products will reach $1 billion in five years. Mr. West, who worked at a Gap store in his teens growing up in Chicago, earns an opportunity to expose his brand to the masses. “We are excited to welcome Kanye back to the Gap family as a creative visionary, building on the aesthetic and success of his YEEZY brand and together defining a next-level retail partnership,” said Mark Breitbard, global head of Gap Brand in a statement. The Gap chain, far from its heyday in the nineties when it started the khakis craze, has not netted an annual comp gain since 2013 and is streamlining its store base. Wells Fargo’s Ike Boruchow wrote in a note, "This partnership could provide a positive halo effect to the ailing Gap brand (and share price) that has struggled to rediscover its ‘cool’ over the past decade, while driving incremental traffic and purchases from new and lapsed customers.”
- Kanye West Teams with Gap – Gap Inc.
- Gap and Yeezy Supply Warrants – Gap Inc./Securities & Exchange Commission
- Kanye West to Design Yeezy Clothing Line for Gap – The Wall Street Journal
- Kanye West and Gap Strike 10-Year Deal for ‘Yeezy Gap’ Apparel Line – The New York Times
- Paying for Yeezy: Gap’s Stock Deal With Kanye West – WWD
- Gap Soars Most on Record After Kanye Deal Brings Cool Factor – Bloomberg
- Gap stock soars after Kanye West touts collaboration with his fashion brand Yeezy – CNBC
- Kanye’s Second Coming: Inside The Billion-Dollar Yeezy Empire – Forbes