Photos: YEEZY MAFIA/Instagram
Can Kanye West make Gap cool again?
On Friday, Gap’s shares vaulted 19 percent after the retailer announced a partnership with Kanye West to produce the YEEZY Gap apparel collection, set to arrive in Gap stores and Gap.com in 2021.
Mr. West is a sometimes-controversial rapper whose marriage to reality star Kim Kardashian constantly lands him on the gossip pages. He is also a fashion designer whose YEEZY collaboration with Adidas has been a wild success.
The Adidas collaboration includes premium-priced apparel, although it’s mostly known for sneakers that regularly sell out at prices ranging from $200 to over $1,000. In April, the Yeezy brand was valued at $2.9 billion.
YEEZY Gap promises to deliver “modern, elevated basics for men, women and kids at accessible price points.” The collection will be produced under Mr. West’s creative direction and his vision “will extend to unique YEEZY Gap expressions in Gap stores and digital channels over time,” according to Gap’s news release.
Going beyond typical partnerships, Mr. West will receive warrants to acquire up to 8.5 million Gap shares or 2.3 percent of current outstanding shares in addition to royalties. The warrants vest as the Yeezy line hits certain sales targets. The New York Times reports that Gap hopes sales of the products will reach $1 billion in five years.
Mr. West, who worked at a Gap store in his teens growing up in Chicago, earns an opportunity to expose his brand to the masses.
“We are excited to welcome Kanye back to the Gap family as a creative visionary, building on the aesthetic and success of his YEEZY brand and together defining a next-level retail partnership,” said Mark Breitbard, global head of Gap Brand in a statement.
The Gap chain, far from its heyday in the nineties when it started the khakis craze, has not netted an annual comp gain since 2013 and is streamlining its store base.
Wells Fargo’s Ike Boruchow wrote in a note, “This partnership could provide a positive halo effect to the ailing Gap brand (and share price) that has struggled to rediscover its ‘cool’ over the past decade, while driving incremental traffic and purchases from new and lapsed customers.”
- Kanye West Teams with Gap – Gap Inc.
- Gap and Yeezy Supply Warrants – Gap Inc./Securities & Exchange Commission
- Kanye West to Design Yeezy Clothing Line for Gap – The Wall Street Journal
- Kanye West and Gap Strike 10-Year Deal for ‘Yeezy Gap’ Apparel Line – The New York Times
- Paying for Yeezy: Gap’s Stock Deal With Kanye West – WWD
- Gap Soars Most on Record After Kanye Deal Brings Cool Factor – Bloomberg
- Gap stock soars after Kanye West touts collaboration with his fashion brand Yeezy – CNBC
- Kanye’s Second Coming: Inside The Billion-Dollar Yeezy Empire – Forbes
Discussion Questions
DISCUSSION QUESTIONS: Does the YEEZY Gap collaboration have the potential to drive a resurgence for the Gap chain? What do you see as the potential benefits and drawbacks to working with Kanye West?
Poll
BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Evan Snively
Director of Planning & Loyalty, Moosylvania
While it’s impossible to say how the market will react, this is exactly the kind of brand jolt that Gap needs. Despite his many controversial activities, Kanye West still commands attention and he has a huge and loyal following — but only time will tell if the YEEZY brand can bring new shoppers to Gap. The big risk with this move is that Kanye West’s followers might not respond, and that would leave the Gap in a really bad spot. This is a Hail Mary pass strategy — and that’s what Gap needs.
No one can predict how successful it will be. But 100 percent credit to Gap for making a bold effort to be culturally relevant. Pricing, promotions and assortments will only take things so far for fashion brands.
This is a great move for the YEEZY brand and it will certainly drive good financials for Gap, at least for a while. But it also means that they have basically given up on the Gap brand as being relevant to today’s, and tomorrow’s, customer. It gives Kayne and YEEZY an amazing platform. It gives Gap a subordinate role. I can’t wait to see the pricing and promotional stance for YEEZY versus pricing and promotional stance for Gap. I can’t help but wonder — what would a now older and wiser Mickey have done?
Kanye is a name and that will bring attention to the brand but more importantly will give Gap a direction. For many years, a lot of people (including a lot of us on this site) have wondered who Gap’s audience is. Maybe this will be a step in the right direction in letting us know.
This is the kind of partnership that can help keep Gap relevant to their target customers. YEEZY is a short-term solution. For Gap – and any retailer – to stay relevant, they must continuously reinvent themselves with new merchandise lines and/or affiliations with influencers, such as Kanye.
Gap is dying and has been for ages. It needed a shot in the arm and Kanye and YEEZY potentially provide that. Gap deserves credit for making this play after years of stagnation and outdated thinking. It must be careful, however, to ensure that it brings something to the party too. In other words it needs to enhance its own products and offer so that the impact of YEEZY has a halo effect on the rest of the business. Failure to do that will simply result in Gap becoming a YEEZY distribution channel. Although if it does, they could eventually sell the entire thing to Kanye – which might be a good way of extracting maximum value for the business!
Two slight problems here. First, the upscale sneaker market is not the same thing as the low-end denim market. YEEZY shoes — and so many other brands in this space — succeed by marketing scarcity. That’s what lets them charge a usurious premium. Gotta to have them? Gotta pay! That’s not quite the same market as mass market jeans and tee shirts. Second, Kanye appeals to younger — with the exception of the President — hipper, music-oriented, celebrity-following consumers. Gap — well Gap’s sweet spot is those shoppers’ grandfathers. And then there is the fact that Kanye, while touched by his own form of mad genius — well — sometimes comes off as more mad than genius, taking positions that have the potential to boost sales in his core market but alienate the mass market. Right now I’d say the real danger in the deal is the potential threat to Kanye and the YEEZY brand.
Have you ever heard the expression “history repeats itself”? Ten years ago (2010) Kodak (another global brand that failed in its digital transformation) was gasping and its CEO back then Antonio Perez launched “So Kodak” and decided to pay extraordinary amounts of money to partner with hip hop stars- Drake, Pitbull, Rihanna, and Trey Songz. The “So Kodak” campaign “will allow us to reach a new audience of people that we have not fared as well with as we wanted to,” stated John Blake, general manager of digital capture and imaging devices.
The strategy failed at Kodak – it will at Gap as well. Thinking that Kanye West will change the fate of Gap will amplify and validate the expression- “history [will] repeat itself.” Marketing executives should pay more attention to history.
One of Gap’s key challenges has been tired designs. Perhaps Mr. West can bring new life to the brand.
Kayne West’s Spaceship lyrics weren’t exactly a love letter to Gap, so this partnership came as a surprise.
Yet both companies face opportunities to make progress.
How Gap benefits:
In music and business, Kanye West is all about strategic collaboration and PR to extend his brand reach. This alliance opens him up to a massive mainstream audience to improve his top line by sharing his expertise in and passion for apparel.
Overall, the partnership could work if it’s based on genuine mutual respect — and listening, learning and adapting to what consumers want.
You know how deep the trouble is when you say, “What do they got to lose?” YEEZY sounds like a great brand — but isn’t it the antithesis of Gap? You are what you are and GAP ain’t YEEZY.
I’m not saying they shouldn’t do it, but maybe if it makes sense, they should convert the chain to YEEZY and forego a business is not delivering. You have stores, infrastructure, and people — you can be YEEZY tomorrow.
Oh, then where do I get my Gap t-shirt? I can get it online.
I admire the effort, but I’m a bit skeptical. Gap needs to define who they are and what their value proposition is to customers. I’d want to start with the answer to that question, and then develop marketing campaigns and/or sponsorships that aligned with that.
Unless Gap thinks its new positioning is “we invented leather jogging pants,” YEEZY may not be perfectly aligned. A lot of what works for the YEEZY brand is scarcity, so it remains to be seen if the YEEZY/Gap product will be limited edition product (which means customers have to come for YEEZY and then discover and love non-YEEZY product), or if the YEEZY/Gap product will be ubiquitously available, in which case it carries a real risk of eroding the YEEZY brand.
I think there is a typo in this title, it should probably read “Can Gap make Kanye West cool again?” lol.
In all seriousness, Kanye is a super sharp and savvy businessman and the contract construct definitely seems positioned to make sure that the YEEZY + Gap collab is a success. The reach and credibility that Kanye will be able to provide is enormous for Gap – they need to make sure that the in-store experience delivers on the hype. That is the biggest potential hurdle I see here – blending the current Gap brand with this collab in-store and having them both be authentic.
Certainly Gap’s problems stem from a complete lack of product to draw customers to stores and have them spend sufficiently. For me, this is a gimmicky partnership with an individual of questionable reliability (he was lying about embracing Trump? That doesn’t look good either way).
I wish Gap well but don’t expect this to be as much magic as the initial headlines will make it appear. Their fundamental approaches need to be rebuilt from the ground up — not the top down.
A savior brought in to “save the brand” confirms Gap has no idea how to save itself. Kanye West with all of his talent and brand success at Adidas will still have to rely on the internal headset at Gap including the people executing his product. Little facts like the Adidas the brand has a “cool” factor and technically sophisticated product execution has given Kanye West the product platform to display his talent. Turning to the Gap platform, hopefully, for Gap’s sake, works to save the Gap brand.
Here on RetailWire, one of the perennial topics is the perils of celebrity endorsements. “Sometimes controversial” is not a good choice for a company that has a broad, middle-class audience. And for those who argued GAP needed a new direction and wanted them to “shake things up,” I’m not at all convinced this is the direction to take.
I’m not going to withhold (my usual) wishing them well, but I have a distinct feeling this not going to end that way.
No doubt that Gap needs this to work. If you’re familiar with, Kanye West however, you have some doubts. Not about his creative brilliance, but about his consistency. Time will be the best measure on whether this will pay off or not.
Gap has had its own challenges with staying relevant and cool. With or without Kanye, consumers need to first decide if Gap is worth a second look. Kanye will definitely help with that, but whether or not a brand with primary success in premium-priced footwear will translate to general market, accessibly-priced apparel is a healthy risk both Gap and Kanye will share.
A tactic in search of a strategy. You know, like Story and Macy’s.