In these days of uncertainty and market downturns, all companies welcome every spike in their stock prices. Gap was certainly pleased when its stock is showing signs of bouncing back after taking a dip in the past couple of months.
The reason? A 10-year deal freshly signed with one influential rapper-turned-fashion mogul.
Gap is reportedly collaborating with Kanye West’s and his Yeezy fashion brand that would begin with the creation of a line of clothing for men, women, and children.
The decade-long partnership will see Yeezy Gap take the fashion world with ‘modern, elevated basics’ that would retail for affordable prices. The first line is expected to drop in 2021.
West announced the good news on his Twitter account officially breaking his months-long hiatus from the account. He hashtagged his post with #WESTDAYEVER accompanied by a photo of the Gap logo with the letters ‘YZY’ replacing the original text inside.
Given the success of West’s successful collaboration with Adidas, hopes are certainly high that those same profits would be gained by this new venture. These expectations certainly showed in the Gap stock’s performance following the announcement.
A welcomed price spike just added another $1.5 billion to the market value of the company when its stock price hit a day peak. However, only a gain of over $700 million was recorded at the end of the trading day bringing the Gap’s market cap to $4.51 billion.
This positive development came at the right timing as Gap, similar to most retailers, has been struggling due to the repercussions of the coronavirus pandemic. Still, it’s worth noting that Gap and West have been cooking up the collaboration even before the global health crisis took over the world.
Beyond that perk for Gap, the 10-year deal is also a monumental achievement for West given his history with the brand. As it turns out, the ‘Famous’ singer once worked at a Gap store when he was still a teenager living in Chicago.
He reportedly worked in customer services and even talked about his former employment in the song ‘Spaceship’. The lyrics of the 2004 tune included references to going back to ‘the Gap’.
The exact financial term of Gap and West’s agreement isn’t known yet. However, some report that the rapper may be entitled to up to 8.5 million shares (equivalent to 2%) of the company once benchmarks are met.