Kanye West ends lucrative clothing deal with Gap
Kanye West has prematurely severed his shoe and clothing deal with Gap, his lawyer confirmed to CBS MoneyWatch.
In a letter sent to the retailer on Thursday, West's lawyer, Nicholas Gravante Jr., told the retailer that it has not met certain contractual obligations. Some of those include failing to sell certain Yeezy clothes in Gap stores last year and to open stores that only sold Yeezy clothing. Gravante said his client — who officially goes by Ye — will now focus on opening his own Yeezy clothing stores.
"Ye had diligently tried to work through these issues with Gap both directly and through counsel (but) he has gotten nowhere," Gravante told CBS MoneyWatch. "Gap left him no choice but to terminate their agreement."
Gap did not immediately respond to a request for comment about its commercial relationship with West. Gap CEO Mark Breitbard sent an email to staff Thursday confirming that the company "is deciding to wind down the partnership."
In 2020, Gap and the hip hop star inked what was supposed to be a 10-year deal under which he designed Yeezy-branded merchandise to be sold in Gap stores. West received royalties and Gap stock based on sales of Yeezy items, which quickly proved a hit with shoppers. For example, a Yeezy hoodie introduced a year ago sold out online in less than 24 hours.
West's departure from Gap will likely put a dent in the rapper-turned-fashion designer's net worth. In 2021, Bloomberg ranked him as the wealthiest Black American, pegging his net worth at $6 billion. Between $3.2 billion and $4.7 billion of that net worth comes from West's partnerships with Gap and Adidas, according to investment bank UBS.
"Just too extreme"?
West leaving Gap marks the second time he has ended a relationship with the company. He worked at a Gap location as a teenager growing up in Chicago. Ye details his Gap employment and the racism he endured there in his song "Spaceship."
The Ye-Gap divorce isn't completely unexpected, said Neil Saunders, managing director at GlobalData Retail. Saunders described Gap as "a cautious company with a stale brand that usually eschews bold moves," while characterizing Ye as "a radical innovator who loves to shake things up."
"In some ways, Kanye was just too extreme for Gap," Saunders said in emailed comments, adding that West's departure marks "a blow to the brand."
Gap reported a $49 million net loss during its second-quarter earnings call last month. Citing poor sales from its Old Navy brand, the company also reported an 8% drop in revenue to $3.86 billion.
Gap shares sank 3% Thursday to $9.06 and have fallen 73% over the last year.
The messy breakup could end up in court, but "this will simply be a further distraction for Gap at a time when it needs to revitalize its core business," Saunders said.
West has also recently feuded with Adidas, accusing the German athletic apparel company of launching a Yeezy Day shopping event without his knowledge. Adidas and Ye signed a clothing partnership deal in 2014.
Fellow musicians-turned-entrepreneurs Sean "Diddy" Combs and Kasseem "Swizz Beatz" Dean have vowed to stop buying Adidas until the company repairs its relationship with West. In recent weeks, Ye voiced his frustrations with both Adidas and Gap through Instagram posts that he later deleted.