As our colleagues at the American edition of SGI are reporting, Kanye West has instructed his attorneys to cite breach of contract and end his deal with Gap. The rapper turned apparel and footwear designer has been badmouthing the company on Instagram as well as in the press, notably in interviews with Bloomberg and CNBC.
In the last of these, West laid out four complaints:
- that Gap was pricing items from his collection at about $200 apiece instead of his envisioned $20
- that Gap had taken a shirt of his team’s design, renamed it, and only then sold it for $19
- that Gap had failed to fulfill a contractual obligation to open stores, rather than mere pop-ups, under his Yeezy brand
- that Gap’s management was placing him “on mute,” so to speak, when he objected to problems like the above
By contract, Gap was to sell at least 40 percent of the Yeezy Gap assortment in stores during the second half of 2021 and open at least five Yeezy-only stores. It has apparently failed on both counts while posting a loss of $211 million for the first half. Sales sufficed to generate a profit in the comparable period of 2020 but were down by 11 percent a year later.
“Everyone knows that I’m the leader, I’m the king,” West said in summation, and “a king can’t live in someone else’s castle.” If this sounds like the rationale for a general change, of course, consider the following from the same CNBC interview:
“This is the day of liberation. This is the day to not be just valued on my cash flow [but] to be valued on the equity that we bring. We’ve seen the influence that we’ve had on two Fortune 500 companies [i.e., declines of 4 percent apiece in the stock prices of Gap and Adidas]. Also […] they [Gap] have a lot of commitments to China. When we wanted to do localized manufacturing, which is completely possible with some of the factories that I’m buying here in California – we can actually bring industry back to America. I feel that in a lot of ways Europe has been the head of prestige, with the luxury brands and luxury vehicles, and China’s been the head of manufacturing. But America, we invented rock ’n’ roll […]. We are the youngest start-up ever, America itself. We invented Apple, we invented Ford, and now we have Yeezy.”
West has complained publicly and in similar terms about his other retail partner, Adidas, which he accuses of producing a knock-off of a Yeezy slide design.
West struck his ten-year deal with Gap back in June 2020 with Sonia Syngal, who was removed as CEO in July of last year. One of his negotiating partners at Adidas, CEO Kasper Rorsted, is on the way out himself, having set his departure for 2023.
According to our colleagues, who cite UBS, Yeezy brand sales accounted for about $1.7 billion of Adidas’ 2020 revenues, for a year-on-year increase of 31 percent despite pandemic-related government measures. West receives 15 percent of the top line for design, Adidas handling sourcing and distribution.
According to Business of Fashion, West claimed on Sept. 4 that Adidas had offered to buy out his Yeezy deal with the company for $1 billion.
West says he’s looking into opening retail stores himself, with the help of another Adidas alumnus, Eric Liedtke, who resigned as head of marketing in 2019 after 26 years with the company, and has since co-founded the apparel company UNLESS Collective. In the words of our American colleagues, “Liedtke was instrumental in forging the brand’s partnership with West and Yeezy, as well as with Beyonce’s Ivy Park.”
