Is Kanye West good for Gap?

In 2020, Kanye West, the globally recognizable and protean entertainer, announced a 10-year deal with all-American retailer Gap. It was an unlikely match. West’s sold-out Adidas sneakers and limited-edition luxury streetwear collections previously cost his fans and followers hundreds or thousands of dollars, but Gap could offer a more accessible price point and wider distribution. For West, it was a dream come true: he had been talking for years about wanting to work with Gap.

In terms of brand association, signing West — who created a coveted line with Adidas that reportedly reached $1.7 billion in annual revenue in six years — was a coup for Gap. It was its boldest attempt yet to regain its relevance with young shoppers after nearly two decades of overall sales declines, store closures and excessive discounts.

But 18 months into the partnership, with just two products released, many are wondering: can Gap still cash in on its association with the controversial celebrity?

The slow rollout has frustrated Gap, according to two sources familiar with the business, even as the brand moved its support teams for West from Cody, Wyoming to Atlanta and Los Angeles over the past year to keep up with the musician’s busy schedule. . The first Yeezy Gap pieces were set to launch in 2020, followed by a full line of apparel and accessories in 2021.

Instead, Yeezy Gap released its first item, a puffer jacket, in June 2021, followed by a hoodie in September 2021, each in multiple color options. Both were supplemented with additional “drops” of the same styles, usually with several weeks of estimated delivery.

Several factors have slowed the schedule, according to the two sources: West, whose creative output can be impulsive and who has the final say on the design of his Gap line, has struggled to keep his products below $100 (his own stipulation, not Gap’s) while maintaining the quality it desires. According to a source, West has also tapped collaborators, including British designer Mowalola Ogunlesi (originally Yeezy Gap’s design director), who left last year.

Representatives for Gap and West declined to comment. In December, Gap Chairman and CEO Mark Breitbard told Glossy: “The energy around this [Yeezy] This partnership is great for the brand and the company, so we are delighted to work with him.

Early Yeezy Gap releases sold out quickly and grabbed headlines, but it’s unclear if they have a “halo effect” on the Gap brand as a whole. The hoodie’s most recent release in January came with the collaboration’s first commercial, a dark, dystopian music video that had little to do with Gap’s family marketing history.

“It felt very disconnected in terms of some of these kinds of partnerships, alliances that we see now,” says Wendy Liebmann, founder of New York-based retail strategy consultancy WSL Strategic Retail.

Gap anticipated more than good PR buzz from its West tie-up: Yeezy Gap is expected to generate more than $150 million in revenue in 2022, according to a bank filing assessing West’s dealings and reported by Bloomberg a year ago. year. The brand predicted Yeezy Gap could become a billion-dollar brand as early as 2023.

Yeezy Gap’s hoodie, released in September. . .

.  .  .  and the Puffer Jacket, which released in June 2021. Both have sold out quickly although little has been revealed about Yeezy Gap's sales performance so far.

. . . and the Puffer Jacket, which released in June 2021. Both have sold out quickly although little has been revealed about Yeezy Gap’s sales performance so far.

Gap is hoping for an effect similar to what West had on Adidas. In 2013, the German sportswear giant launched a coveted limited-edition sneaker line with West that gradually grew into a $1.7 billion business as of 2020, according to Bloomberg. The collaboration was the most high-profile in a series of collaborations that helped Adidas woo American buyers and win over Nike.

But from a business perspective, ready-to-wear has long proven to be a trickier proposition for West. He has presented several clothing collections at New York and Paris fashion weeks over the past decade, ranging from high-end designer items to activewear. While the fashion industry’s reaction became more positive over time and its aesthetic approach continued to influence mainstream trends, few collections were released. Meanwhile, West’s high-end touring merchandise, consisting of T-shirts and other staples, drew dozens of buyers with each album release.

Now West’s latest merch collaborator, Balenciaga creative director Demna Gvasalia, is joining his job at Gap. The brand announced in January that the Kering-owned French luxury house will collaborate on a collection for Yeezy Gap which is expected to hit the market in June.

For fashion followers, the collaboration within a collaboration will be highly anticipated: West continues to have an outsized influence on streetwear trends, while Gvasalia is widely recognized as one of the most innovative designers working today. today.

But Gap remains the least interesting player in this merger. The brand generated net sales of approximately $2.9 billion in the first three quarters of its 2021 fiscal year, down 12% from the same period in 2019, as it closed stores and invested in e-commerce.

And while news of the West collaboration helped drive Gap Inc’s 2020 stock price up by as much as 40% within hours of its breakup, the price has since lost around 80% of the gains. made for most of the first year. Last week, Morgan Stanley downgraded Gap to “underweight”, citing lower margin expectations for the year ahead.

“It’s a win on the PR side and a question mark on the business side,” says Neil Saunders, chief executive of consultancy GlobalData. “It doesn’t have the consistency of being a real commercial operation, [but] it could be completely deliberate.

Kanye West in New York in January.  West's listing marked Gap's boldest attempt yet to regain relevance with young shoppers

Kanye West in New York in January. West’s listing marked Gap’s boldest attempt to regain relevance with young buyers © GC Images

Balenciaga announced in January that it would be collaborating on a collection for Yeezy Gap, which is expected to hit the market in June.

Balenciaga announced in January its collaboration on a collection for Yeezy Gap, which is scheduled for release in June © GC Images

So far, not much has been publicly revealed about Yeezy Gap’s sales performance. Gap Inc chief executive Sonia Syngal said on a conference call last year that 75% of Yeezy Gap shoppers who pre-ordered the down jacket’s first launch were new to the brand. The ensuing hoodie attracted a similar level of new customers and generated “the most single-day sales per item in Gap.com history,” Syngal said in November. “This partnership unlocks the power of a new audience for Gap: Gen Z and Gen X men from diverse backgrounds,” she said.

But Syngal didn’t say how many of those shoppers also shopped across the rest of Gap’s assortment, or how many returned after the initial purchase. Some Yeezy Gap shoppers may never even visit Gap.com: The sweatshirt’s last release in January was sold through a separate website, YeezyGap.com, following a similar structure with its Adidas collections.

But Gap’s customer loyalty has increased in 2021, according to marketing research firm Brand Keys, rising to fifth in the clothing category after years of hovering between 10th and 20th. West’s association could be a factor: North American shoppers cited “unique merchandise” and “brand buzz” as positive factors.

Gap has made other efforts to connect with a new generation of shoppers — like posting a logo hoodie after it went viral on TikTok — but they’ve yet to have an impact. significant with Gen Z. The brand failed to make the top teen list. 10 favorite clothing brands in Piper Sandler’s latest biannual survey – where Gap took last place in 2001 – consistently appearing, instead, on the list of brands no longer worn by respondents.

West has the kind of clout to help Gap change his public perception, but he’s also been known to court controversy. In the months since the Gap deal was announced, he orchestrated a disorganized campaign for the US president. He also suggested he would withhold Yeezy Gap releases if not named to its board, citing “board seats matter” in a Twitter post.

West also said he would set up a national manufacturing facility for his collaborations for Gap and Adidas in Wyoming where he purchased ranches and several commercial properties. According to local newspaper Casper Star Tribune, only a handful of locals have been employed by the operation, and West has put most of his commercial properties in the state up for sale by the end of 2021. All this while exiting a new album, playing at concert-style listening events and wading through a high-profile divorce.

Gap has never commented on those headlines, beyond assuring analysts that West was “focused” on the line during a March 2021 earnings call.

Balenciaga could be the stabilizing force Yeezy Gap needs to deliver a more robust lineup that could become the billion-dollar brand that Gap dreams of. But even then, the question for Gap will remain how much of that buzz translates into interest in jeans and t-shirts from Gap and its more than 500 stores.

“[So far] it really has nothing to do with Gap,” Saunders says. “Kanye could have done it on his own and it would have been just as successful.”

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