Gap soars most on record following Kanye West deal

Bloomberg

Kanye West is going to make Gap cool again. At least, that’s what investors hope.
The struggling apparel company’s shares soared the most in at least 40 years after it revealed a partnership agreement with the head-turning rapper and designer. West, whose sneaker line with Adidas AG routinely sells out, will work with Gap Inc on a new line of apparel for men, women and kids called Yeezy Gap, the company said.
The deal is a multiyear partnership, according to a Yeezy spokesperson. West has been travelling to Gap’s San Francisco headquarters from his ranch in Wyoming to work on the line, which is still in its design phase, the spokesperson said. The line, which won’t include footwear, is expected to debut in stores and online next year.
The move may give Gap some much-needed life as it struggles with changing consumer tastes and a turnaround effort that has been stymied by the coronavirus pandemic. Hitching itself to the sometimes-controversial artist could help Gap reinvigorate the brand, said BMO Capital Markets analyst Simeon Siegel.
“At the heart of it, the task of a brand is to figure out how to balance exclusivity and distribution,” he said. Gap has struggled with that, but if West can elevate the brand while taking advantage of the company’s broad reach, “that then allows Gap to sell a lot clothing.”
The arrangement will expose West’s upscale brand to a broader market while letting Gap capitalise on Yeezy’s recent growth. Mark Breitbard, global head of the Gap brand, said in the statement that the new line would build on “the aesthetic and success” of the Yeezy brand.
West, who worked at a Gap store as a teenager in Chicago, will also have input on presentation in stores and the e-commerce website.