Gap shouldn’t expect to replicate Kanye’s Adidas success

Gap’s new guy.
Gap’s new guy.
Image: Amy Harris/Invision/AP
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In 2015, Gap eliminated the post of creative director and opted for a team-oriented approach after multiple designers in the role failed to turn around the long-struggling brand. ”We have cycled through so many, and each has been proclaimed as the next savior,” Art Peck, Gap Inc.’s former CEO, told the Wall Street Journal in 2016.

Now Gap is turning to a new savior: Yeezus, aka Kanye West. The retailer and the rapper-designer announced a long-term partnership today that will see items such as hoodies, t-shirts, outerwear, and jeans from their collaboration hit Gap’s stores and website in 2021.

The Yeezy Gap logo, which is the letters "YZY" in the Gap font on a navy background
Coming soon.
Image: Yeezy

In theory, the match could be the injection of energy Gap needs. Its clothes have been stale and lacking identity for years. West, meanwhile, has helped boost sales at Adidas through his collaboration with the company, and built his fashion company, Yeezy, up to a nearly $3 billion valuation, according to a Bank of America document reviewed by Bloomberg this year.

But a resurgence for Gap is far from assured, as West’s previous success drumming up demand for pricey sneakers doesn’t have much relation to Gap’s current needs as a mass clothing retailer.

The foundation of Yeezy, and the underpinning of its valuation, is its footwear collaboration with Adidas. The clothing line, which Yeezy produces independently of Adidas, hasn’t fared nearly as well.  (There appears to be nothing that prevents West from designing for both Adidas and Gap.)  To date, it hasn’t had anything like the success of the Yeezy Boost 350—its best-selling sneaker style—and has been inconsistent releasing new collections. Reactions to the clothes, with their muted colors, drop-shouldered shapes, and utilitarian references, have been generally lackluster, leading Vogue, for one, to note that “the real heroes of the Yeezy empire are the sneakers.”

Models wear the Yeezy Season 4 collection by Kanye West during a fashion show
Yeezy Season 4.
Image: AP Photo/Leanne Italie

The success of those sneakers has been partly a result of careful management by Adidas. The market for premium sneakers, which includes Yeezy styles like the $220 Boost 350, is premised on supply and demand. When Adidas initially launched the Yeezy brand in 2015, it released the models in limited quantities, rumored to number at most in the tens of thousands, to ensure demand stayed high. By comparison, it sold 15 million pairs of its retro Superstars that year. Adidas only started scaling up Yeezy volumes later, reaching what was said to be up to one million pairs of the Yeezy Boost 350 in 2018. (Adidas has never released official distribution numbers.)

The Gap collaboration, on the other hand, will be released to “millions of customers,” according to a Gap spokesperson, suggesting mass distribution rather than carefully parceled numbers. It will also be priced comparably with Gap’s existing offering, making it accessible.

Whether shoppers will clamor for widely available Yeezy products, and clothes rather than sneakers, season after season, is far from certain. West does has undeniable clout with shoppers, and he’s got a lot of motivation. Gap will pay Yeezy royalties and is offering equity of up to 8.5 million shares (pdf) if the line hits $700 million in net sales in a fiscal year. West also isn’t working alone. He has hired talented Nigerian-British designer Mowalola Ogunlesi as design director for the project.

One group that’s optimistic at least is investors. Gap’s stock jumped about 40% after news of the deal before leveling out to a roughly 19% gain.