By Brooke Sinclair
- Kanye West is alleging Gap breached the terms of their agreement and is seeking to terminate the deal
- Wells Fargo stated initial estimates of Gap’s Yeezy line could bringing in almost $1B in sales next year, far ahead of the $1B Gap was aiming for by 2025
The story behind the Yeezy-Gap (GPS +1.09%) billion dollar war is a beautiful dark illustration of cultural hype clashing with business. Kanye West, known as Ye, is alleging the retailer had breached the terms of their agreement. Wells Fargo stated initial estimates of Gap’s Yeezy line could bring in almost $1 billion in sales next year, far ahead of the $1 billion Gap was aiming for by 2025. The partnership between Gap and Yeezy that has now been terminated was set to continue through 2026.
Why This Matters: The big named box retailer promised Ye 40% of sales in brick & mortar stores, along with plans to open five Yeezy stores by July 2023. Kayne also asked for a seat on the Board, an idea that was quickly dismissed. “Everyone knows I’m the leader. I’m the King, A king has to make his own castle. They can’t treat me like I’m dead,” West told CNBC.
His vision, passion, and energetic following is exactly what the doctor ordered to make Gap culturally relevant again. However, culture and price were misaligned as Ye wanted pieces to be available at $20, but Gap priced them much higher than their typical collections. Currently Gap’s Yeezy collection ranges from $60 to more than $300 on the retailer’s site. Even with these higher prices, Gap has been struggling with slumping sales and in August slashed its financial outlook.
Once a breakthrough and disruptive brand, today Gap’s brand is the prime example of “living inside the box,” but that’s not how Ye operates. If you’ve never met or heard of Kayne before, allow me to introduce you to “out of the box.” He thinks outside the box and so do his followers, which does not work in today’s buttoned-up, pressed cargo pants style at Gap.
“I’m an innovator and I’m fighting for a position to be able to change clothing,” said West.
What’s Next: Forbes reported that Kanye has proven his power in dollars and cents, and it makes no logical sense for Gap to let him go. Adidas (ADDYY +0.25%) and Gap reminded Ye through social media, that they’re willing to separate amicably. They reminded him that Yeezy is still banned from footwear, apparel, accessories, or any design that resembles items from their deals in his chain of Yeezy stores. After the CNBC interview and public spat, Gap’s top executive said in a memo the company would “wind down” the Yeezy Gap partnership.
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