Kanye West’s threat to walk away from his fashion company’s fledgling association with The Gap has led to a sharp drop in stocks.
© Brad Barket / Getty Images for Fast Company
Steven Smith and Kanye West speak on stage at “Kanye West and Steven Smith in Conversation with Mark Wilson” on November 7, 2019 in New York City.
Gap’s shares fell nearly 6% on Monday after West made comments at a public event on Sunday. Videos taken at the event show the rapper criticizing Gap and Adidas, another clothing company with which his Yeezy brand was associated.
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West noted that he was not on the board of any of the companies. “That has to change today or I’m leaving,” he said.
Adidas declined to comment, and Gap did not immediately respond to a request for comment from CNN Business.
Gap, which has been struggling lately, announced a 10-year partnership with Yeezy last month for a new line of clothing that is “modern and high staples for men, women and children at affordable prices” that will come out next year. It is unclear if he is even allowed to walk away from the deal.
The initial announcement caused Gap shares to jump nearly 19% on June 26. The shares have lost half of those gains since then.
The Yeezy deal could give Gap a much-needed financial and creative boost. Gap has been struggling: Sales fell 43% in the quarter ending May 2, but May’s online sales doubled those of a year ago.
Gap also failed to pay rent in April due to temporary closings. He said the cash-saving measures taken during the quarter left him with $ 1 billion in cash available as of May 2, a little more than he had a year ago.
West has had great success in the fashion space. He became the first non-athlete to launch a full collaboration with Nike for the original Air Yeezy sneakers in 2009, and the brand’s sneakers often cost several hundred dollars. His significant partnership with Adidas that started in 2013 earned him praise.
– Oliver Effron contributed to this report.
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