By Gary Symons
TLL Editor in Chief
Rapper and entrepreneur Kanye West has abruptly ended his relationship with Gap Inc., accusing the company of failing to meet its obligations.
West’s lawyers sent a letter to Gap on Thursday notifying it of a termination of the partnership. West alleges Gap breached its agreement with West (also known as Ye) by not selling the Yeezy Gap-branded products at its brick-and-mortar outlets and failing to open dedicated stores for the brand.
West now intends to open his own chain of stores and to go into competition with Gap.
“Gap left (Kanye West) no choice but to terminate their agreement,” said lawyer Nicholas Gravante Jr. “Ye will now promptly move forward to make up for lost time by opening Yeezy retail stores.”
Gap has not commented on the issue, and the news has impacted the stock price of parent company Banana Republic, which dropped 3.6% on Thursday.
The letter from West’s lawyers said the apparel chain can sell its existing stock of Yeezy Gap products, after which sales would cease.
West entered the partnership in 2020 when he signed a 10-year deal with Gap to create a line of clothing under the Yeezy Gap brand. The first product from that line – a blue puffer jacket – sold out within hours of its launch in mid-2021.
The breakup between the two brand has been a long time coming. In early September West had threatened to walk away from the deal, and Reuters also reported that Gap Brand President and Chief Executive Mark Breitbard wrote in an internal memo that Gap would wind down the partnership with Kanye as the parties were not aligned on how to work together.
West also made comments along the same line, saying in a since-deleted Instagram post, “You have to really give me the position to be Ye and let me do what I’m thinking, or I have to do the thinking somewhere else.”
As part of the deal, West’s collaboration with Gap entitled the star to equity in the apparel company if the deal is successful. West stood to gain 8.5 million shares if $700 million in net sales was reached in one year, equating to two per cent of Gap’s stock.
Many financial analysts said the breakup will hurt Gap, which is among the many fashion outlets that has struggled through the pandemic. Some, however, believe the breakup was inevitable and that it will not hurt Gap in the long term.
“Gap is a cautious company with a stale brand that usually eschews bold moves. In contrast, Kanye is a radical innovator who loves to shake things up,” said Neil Saunders, managing director of GlobalData. “While Kanye could have injected a dose of energy into Gap, the incompatibility of the two visions meant that frustrations were inevitable. In some ways, Kanye was just too extreme for Gap.”
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