Gap, Kanye West announce Yeezy collaboration

2020/06/29 Innoverview Read

Dive Brief:

  • Gap Inc. on Friday announced a collaboration between its namesake brand and Kanye West's Yeezy apparel label. The Yeezy studio will design "basics for men, women and kids at accessible price points," the company said.

  • The "Yeezy Gap" line is expected to be available at Gap stores and online starting next year, according to a Gap Inc. press release. A Gap Inc. spokesperson said that it's not a 10-year partnership as reported elsewhere, but declined to disclose details or length of the contract. "We intend for this to be a robust creative partnership with multi-season product development," the spokesperson told Retail Dive in an email.

  • The news follows reports that the struggling apparel retailer has backed out of plans announced in January to partner with New York-based unisex-apparel designer Telfar Clemens. "While we've chosen not to move forward with the Gap x Telfar partnership at this time, we're making whole on our payment regardless and have only respect and appreciation for Telfar's time and vision," a Gap Inc. spokesperson said.

Dive Insight:

As Gap Inc. shares enjoyed an uncharacteristic bounce following the news of its partnership with West, some analysts hailed the deal.

"In our view, the alliance reflects new management's creativity in executing a Gap brand turnaround, and could develop into a long-term positive for the challenged brand," Morgan Stanley analysts led by Kimberly Greenberger said in emailed comments Friday. "However, we struggle to size the opportunity until we can assess initial consumer demand."

Demand has been healthy when it comes to Adidas's partnership with West's Yeezy brand. "We would point out that [Adidas] began to partner with West 5 years ago, creating a halo for the brand and driving the stock meaningful higher over that time," Wells Fargo analysts led by Ike Boruchow said Friday. "While this announcement was unexpected, it is highly aligned with our view that [Gap Inc.] ownership and new management have taken on a new 'all options on the table' mentality, and are highly committed to finding new and creative ways to unlock value from their portfolio."

But the project's prospects could be undermined by Gap's own longstanding brand position, which for years stood for high-quality basics that defined a low-key American style. That aesthetic has been embraced by Telfar, who reportedly noted the affinity between the brands when their deal was announced in January. "It shouldn't be a surprise that I'm obsessed with Gap — what I do is about the idea of 'normal' — and changing that — because that is when you change real life," he said, according to a January report from New York magazine's fashion site, The Cut. "Gap created the blueprint for my brand because the Gap person is literally everybody."

That, however, is not how Yeezy works, according to Matt Powell, NPD Group vice president and senior industry advisor of sports. "The popularity of the Adidas collaboration is driven by scarcity. The more scarce the product is, the higher the resale value," he told Retail Dive in an email. "A more mass distribution goes against the principle of scarcity. I'm sure the initial Gap release will sell out due to the novelty. But, as I've often said, when everyone can get one, no one will want one."

Moreover, they don't share customers, and that isn't likely to change, according to Kristin Bentz, president of KB Advisory Group. "There's no way in hell that Yeezy customer has shopped [at Gap] in the last 20 years and there's no way in hell they're going to shop there now," she told Retail Dive by phone, noting that it's probably an expensive collaboration at a time when Gap Inc. is failing to pay rent and going deeper into debt to shore up its finances. "At first I thought it was a joke. This to me is lipstick on a pig for Gap after years and years of missteps. I don't think this resonates with that Gap consumer. This is some kind of weirdo last-ditch effort."

(Source: Retail Dive )