Kanye West and Gap’s partnership of corporate disruption experiments has officially come to an end.
As West is now known, you formally notified Gap in a letter Thursday that you were terminating your contract on the Yeezy Gap apparel line for breach of contract. We are planning to open.
The partnership, which was widely announced in June 2020, could last for 10 years, and Gap hoped to generate more than $1 billion in annual revenue. Yeezy Gap encompasses men’s, women’s, and children’s clothing to benefit both, turning Gap’s fortunes around by giving Gap a cool veneer and Ye access to the mass market.
Gap has confirmed that the deal ends with a message to employees.
“We share the vision of bringing high quality, trend-forward and practical design to everyone through Yeezy Gap’s unique omni experience. how Together we will realize this vision, but we are not aligned,” wrote Mark Breitbard, Gap brand president. “And we are deciding to dissolve the partnership.”
Ye’s attorneys originally sent Gap a notice of breach of contract on August 16. Gap responded in his Aug. 23 letter, but according to Ye’s attorney, Nicholas Gravante Jr., agreed. “
He did so on Thursday, claiming the retailer “waived its contractual obligations.” The YZY Gap store was scheduled to open in late 2021, according to the letter.
“You have been diligently trying to resolve these issues, either directly with Gap or through your attorneys,” said Gravante, global litigation co-head of Cadwallader Wickersham & Taft.
He added that Ye will soon move forward to make up for lost time by opening Yeezy’s own stores.
Gap will continue to sell new Yeezy Gap products already made, including the holiday season collection, through the first half of next year.
The Wall Street Journal previously reported that Ye notified Gap that he wanted to end the partnership.
Two years ago, when the mall stalwart made a splashy announcement about a partnership with Ye, the company’s stock saw its biggest rally in at least 40 years. Industry insiders were stunned by the partnership between a highly corporate entity and a highly non-corporate artist, Mickey Drexler, Gap’s former CEO, later said. Yahoo Finance “In my opinion, it makes no sense.”
At the time, Breitbart said the retailer was thrilled to work closely with Ye to “define the next level of retail partnerships.”
The deal included an option to renew after five years, at which point Gap wanted Yeezy Gap to generate $1 billion in annual sales. It said it would be on store shelves in 2019, but the release date continued to be postponed. Analysts on the phone with Gap executives frequently asked for updates on the apparel line.
Only two products were released in the first 18 months of the deal: a puffer jacket and a sweatshirt. They were sold online only.
It wasn’t until May that the brand’s atelier became a full line of 36 styles, after Ye enlisted the help of Balenciaga’s single-name designer Demna. Yeezy Gap designed by Balenciaga, was announced. These items he finally hit stores in July, and many of them were priced higher than Gap’s usual. A hoodie was $240 and a t-shirt was $140.
Shoppers lined up around Gap’s location in Times Square. There, clothes were intentionally piled up in what appeared to be garbage bags throughout the store.
It was unclear whether changing the trajectory of the gap would be enough. In the most recent quarter, Gap brand sales fell 10% year-over-year. The Balenciaga Yeezy line is governed by a separate agreement and is not affected by the Yeezy Gap termination notice.
According to another Cadwalader partner, Danielle Tully, Ye “hasn’t taken any action on that deal at this time.”
The partnership with Ye is fraying as Gap is looking for a permanent CEO. Sonia Singal, who oversaw the Yeezy Gap deal, left the chain in July. Bob Martin serves as interim CEO.
Ye also posted a statement on Instagram, suggesting that he is frustrated with his long-term relationship with Adidas. In 2020, the partnership brought in about $1.7 billion in revenue, according to Bloomberg. It is scheduled to expire in 2026.
Ye is known for being very opinionated and fond of control, said Staci Jennifer Trager, who heads fashion legal at Nixon Peabody, where she partners. That can be difficult when working in partnerships.
“Kanye seems to have a very specific vision and a strong desire to see things a certain way,” Trager said. “That level of control and desire to control things and run them that way may not equate to collaborating with a brand.”
These brand partnerships are like marriages, she said. Couples have to compromise on which restaurant to go to, even if they don’t like one dish. Ye’s move was the same as ruining dinner plans.
“Now he can make all the decisions and eat pasta every night,” Traeger said.