Kanye West Yeezy has created a clothing line for men, women and children that will sell in Gap stores and on its website starting in 2021. Shares had risen about 20% in the last hour of trading on Friday, but had been significantly higher 40% earlier in the day. The deal was scheduled ahead of the outbreak, but comes at a lucky time as Gap tries to recover from trading losses.
Shares listed by Gap rose on Friday after Kanye West shared a photo showing him partnering with a broker. Shares closed 18.8% on Friday at $ 12.07, but had risen about 40% earlier in the day. Moving to add more than $ 700 million to the Gap market, we are pushing you up to $ 4.5 billion.
The retailer said that in the press it appears that fashion items, Yeezy, are made of “modern high-end foundations” that are sold “at affordable prices.” The new line will pass in 2021. West is the sole owner of the Yeezy brand, Gap said in a statement.
The partnership is a ten-year contract, someone who knows the terms of the agreement said. Gap did not disclose the terms of the agreement, but said Jeezy would accept payments and would find a balance depending on how much was sold. Gap has issued a letter authorizing Yeezy Supply to receive up to 8.5 million shares depending on whether the product meets sales targets, according to the Securities and Exchange Commission.
Yeezy Supply guarantees the first third of those shares if the annual sales of the Gap-Yeezy line reach $ 250 million and the next third if the sales reach $ 450 million and $ 700 million annually. Those warranties expire 20 days after the company has confirmed its sale of 2025 funds.
After Friday’s meeting, the total value is worth more than $ 100 million in current stock prices. All in all, Yeezy Supply may have up to 2% ownership of Gap, based on the current company-based calculations.
The fashion collaboration may seem unattractive to some industrial viewers, but they may have a common ring for West music fans. He worked at a young Gap store and focused his time there on the music “Spaceship,” on his 2004 College Dropout album.
The retailer and artist have been in contact with people for years, people familiar with the situation told CNBC, where West spoke openly about his hopes of working with the retailer in early 2015. Last year, Gap and Jeezy began to negotiate more about striking a deal, people said.
The agreement was already in place before the epidemic. However, the project comes at a lucky time for Gap and gives the company much-needed power on Friday. Gap strives to meet customers before the outbreak. Closed shops during the stay at home encountered another problem.
Gap’s namesake brand retailers were down 50% in the first quarter, ending the end of May 2. The company, which exceeded tax payments during the violence, was sued by retailer Simon Property Group.
Gap chief executive Sonia Syngal told analysts earlier this month that the company was working to improve its product.
Consistently, Gap will find a mix of the highest quality products that can attract new customers or attract long-term customers to return. Jeezy will reap the benefits that brick and mortar retailers have given brandststart – access to the platform and supply chain that can accelerate growth. The Gap deal could also help Jeezy, who sells high-priced sneakers for hundreds of dollars, reach out to more knowledgeable customers at a reduced cost of consumer spending.
Announcing the deal, Gap said the Western experience working in one of its stores has become a full circle.
“We are thrilled to welcome Kanye back to the Gap family as a creative idea, building the beauty and success of the YEZYY brand and defining the next store collaboration,” said Mark Breitbard, head of global production, news release.
In a tweet on Friday, West included a photo of clothing being taken out of bag that says “developed by Yeezy and GAP.” He included the hashtag #WESTDAYEVER. The tweet was previously reported by Complex.
His wife, Kim Kardashian West, expressed excitement about the collaboration and described it as a “dream come true.”