Kanye West is terminating the contract between his company Yeezy and Gap Inc., according to a letter shared by his lawyer.
via CNBC:
The move comes after Gap failed to meet its obligations in the companies’ agreement, including distributing Yeezy products in its stores by the second half of 2021 and creating dedicated Yeezy Gap stores, according to the letter shared with CNBC.
“Yeezy notified Gap of its concerns in August and gave the company a contractually-designated 30 days to cure its breaches,” Nicholas Gravante, a lawyer for Ye, told CNBC. He said Gap took no action on the concerns.
CNBC has reached out to Gap for comment. Gravante said the termination letter was sent to the company Thursday.
Gravante said Gap’s noncompliance with the agreement has been costly and that “Ye will now promptly move forward to make up for lost time by opening Yeezy retail stores.”
Announced in June 2020, the partnership between Gap and Yeezy was set to continue through 2026. Yeezy, owned solely by Ye, would receive royalties and equity based on the sales. Gap also agreed to distribute 8.5 million shares to Yeezy as certain sales targets were met.
The first product in the Yeezy Gap line, a blue puffer jacket, sold out in hours upon its release online in June 2021. Gap later made headlines selling Yeezy products in its Times Square store, but the termination letter said those products were the result of a separate contract between Yeezy, Gap and Balenciaga.
Following its launch, Wells Fargo predicted that the partnership could bring in $1 billion in sales in its first year. But Gap has been struggling with slumping sales and in August slashed its financial outlook. The company has acknowledged missteps with its Old Navy chain, and has been looking for a new leader since its CEO left in July.
In recent weeks, Ye has publicly aired his grievances with business partners in recent weeks. The rapper, producer and designer made his squabbles with Adidas well-known in a slew of Instagram posts attacking the company’s board, and in an interview with Bloomberg said it was “time for me to go it alone.”
“I made the companies money. The companies made me money. We created ideas that will change apparel forever. Like the round jacket, the foam runner, the slides that have changed the shoe industry. Now it’s time for Ye to make the new industry. No more companies standing in between me and the audience,” he told Bloomberg.
As a teenager, Ye worked in a Gap store and referred to his time there in the lyrics of “Spaceship,” on his 2004 College Dropout album. West and Gap had reportedly been in contact about a potential deal since 2015.
Shares of Gap were down 4% in pre-market trading.
Kanye is…Kanye, but at the end of the day business is business and a deal is a deal. It’ll be interesting to see how GAP responds.
