Kanye West, who legally changed his name to Ye, ended his partnership with Gap on Thursday.
In 2020, the duo announced a planned 10-year deal for Ye to collaborate with the brand on clothing. Analysis from Wells Fargo in 2021 found the partnership could bring in $990 million in sales for the brand a year, per CNBC.
According to the Wall Street Journal, which first reported on the partnership’s dissolution, Ye’s lawyer sent a termination letter to Gap Thursday. This followed weeks of Ye posting about Gap and another corporate partner, Adidas, on Instagram in now-deleted posts.
The news didn’t play over well for Gap’s shareholders. The company’s stock dropped 3.9% Thursday morning.
Why Ye’s deal with Gap broke down
Interim Gap CEO Mark Breitbard cited operational differences in a memo to employees Thursday.
“While we share a vision of bringing high-quality, trend-forward, utilitarian design to all people through unique omni experiences with Yeezy Gap, how we work together to deliver this vision is not aligned,” he said in the memo, per CNBC.
Ye was franker. “I’m sorry, I am not going to argue with people that are broker than me about money,” he told CNBC. He has also indicated on Instagram he wants more control over his Yeezy products in general.
On Monday, Ye posted what appears to be some sort of contract with Gap and Adidas (that is now deleted, as is his habit) that said “Welp I guess the war’s not over.”
That same day, the New York Post reported Ye would be using Alex Spiro as his lawyer in his effort to break away from his deal with Gap — the same one who is part of the effort to get Elon Musk out of his merger agreement with Twitter.
Spiro lawyer is a partner at Quinn Emanuel Urquhart & Sullivan and did not immediately respond to an emailed request for comment.
Back in 2020, when deal was struck, it was agreed that Gap would sell a full Yeezy Gap clothing line in stores and online within the first six months of 2021, per the New York Times.
The first product that came out of the collaboration was a blue puffer jacket – in June 2021. The second was a hoodie launched in September 2021 that the company said generated the most online sales in one day in Gap.com’s history, Insider reported.
Earlier this year, a collaboration between Ye, Gap and luxury fashion house Balenciaga made headlines because it was displayed in giant trash bags in stores.
Ye’s lawyer told Gap that he was ending the partnership because the company did not put certain products in brick-and-mortar Gap locations or build Yeezy-focused stores, CBS News added.
What each entity stands to lose
Ye was estimated last year to be the richest black man in America. But a fair amount of his wealth is tied to partnerships with Gap and Adidas, CBS noted. He has also publicly criticized Adidas.
Gap has its own set of problems. Its stock is down 62% since the same period last year. The partnership with Ye was supposed to provide a fresh boost for the struggling retailer, per the NYT.
At the end of the day, it might have just been a bad match. Ye is someone who likes to “shake things up,” whereas Gap is not, Neil Saunders, managing director at GlobalData Retail, told CBS. “In some ways, Kanye was just too extreme for Gap.”