Gap stock rose by as much as 40% Friday morning after rapper and clothing designer Kanye West said he had partnered his fashion company, YEEZY, with the struggling Gap brand to create a line called YEEZY Gap.
Shortly after the announcement, Gap stock uncharacteristically shot up and easily topped the S&P 500, which had fallen for the day by 2.4%. Gap shares fell back a little by day’s end, rising $1.91 or 18.80%, to close at $12.07.
“#WESTDAYEVER,” West, 43, tweeted.
Gap Inc. (NYSE: GPS) announced the deal after its ubiquitous stores had flailed in recent years, partially due to what executives said was poor marketing and brand management. The company, which also owns Athleta, Banana Republic, and Old Navy, announced the multiyear partnership intends to have “youthful energy and effortless style,” a company spokesperson said.
Some store associates said they had been surprised by the collaboration, which will merge West’s pricey, modern — sometimes derided as unattractive — creations with Gap’s traditional, generally conservative apparel.
YEEZY — a brand best known for its sneakers that range from $200 to over $1,000, but which also produces clothes — was valued at $2.9 billion in April. Gap said in its most recent quarterly earnings report that its net sales had decreased by 43%, from $3.7 billion at the same time last year to $2.1 billion this year.
The two companies will remain separate during the partnership. Gap declined to disclose details of the contract. There were no plans, a spokesperson said, to extend the YEEZY partnership to any of Gap’s other subsidiaries.
Over the last few months, Gap executives bemoaned the disparity of sales among its stores. In January, it pulled the plug on a plan to separate its Old Navy brand from the rest of the company.
All of its stores had to close on March 19 near the beginning of the coronavirus pandemic in the United States. Around the same time, the company furloughed more than 80,000 employees in the U.S. and Canada.
The company reopened more than 1,500 stores by June 1 in North America as executives said they had, among other measures, reduced corporate expenses, temporarily suspended rent payments at its stores, and reassessed how much inventory to order given the demand.
In the last few months, executives said, Athleta and Old Navy had performed well — though not comparable to what sales were before the pandemic — while there were “improvement opportunities” at Banana Republic and Gap. Leaders mulled which underperforming Gap stores would permanently close.
There are seven Gap stores in Philadelphia and another in the King of Prussia Mall.
The collaboration with YEEZY was a hopeful sign for a brand that faced a dire future.
“West has become a disruptive force across music, footwear, fashion, architecture and more,” the company said in a statement, adding that the longtime rapper had worked at a Gap store in Chicago as a teenager. “This new partnership will introduce both the Gap and YEEZY brands to new audiences.”
West, who said in 2015 that he one day wanted “creative control of the Gap,” as well as to be the “Steve Jobs of the Gap,” will lead the design behind the line.
Gap said West intended to make affordable T-shirts, hoodies, bottoms, and outerwear. Once released, he is expected to collect royalties and equity, depending on sales.