Gap’s shares fell as much as 7.4 percent on Monday after Kanye West threatened to kill its fledgling association with its Yeezy brand unless it was given a place on the company’s board.
The rapper-turned-politician issued an ultimatum similar to sportswear giant Adidas, which produces his brand’s coveted sneakers, in a labyrinthine speech at his first meeting of the 2020 presidential campaign over the weekend. West, 43, said he would “walk away” from both companies unless they put him on their corporate meetings.
“At risk or without risk of losing any possible deal, I am not on the Adidas board. I’m not on the Gap directory, ”West said at the Sunday night event in South Carolina. “And that has to change today, or I’m leaving.”
It is unclear whether the artist “Closed on Sunday” will carry out his threat. But if it does, it could spell the premature end of a partnership that Gap hoped to generate $ 1 billion in annual sales after five years, according to The New York Times.
It’s also unclear whether Gap or Adidas have considered adding West to their boards. Adidas declined to comment on West’s comments on Monday, while Gap did not immediately respond to a request for comment.
Gap shares soared nearly 19 percent on June 26 when it announced the Yeezy Gap line of affordable “basics” that will hit stores next year. Under the agreement, Gap agreed to pay Yeezy, which West owns only, royalties and potential capital related to sales performance.
Yeezy’s Adidas sneaker business isn’t a small operation, either – Bank of America valued it at as much as $ 3 billion last year, according to Bloomberg News, and Forbes estimates it raised $ 1.3 billion in revenue in 2019.
But West’s ultimatum did not hurt the German conglomerate’s share price. Its Frankfurt-listed shares ended the day 1.8 percent at 242.20 euros ($ 277.07).
Gap separately announced plans on Monday to require customers to wear masks at its North American stores beginning August 1 amid a surge in coronavirus cases. Other retail giants like Target, Walmart, and CVS have implemented similar mandates.
Gap’s shares decreased 4.1 percent to $ 12.36 at 1:21 pm
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