Gap shares drop nearly 6% after Kanye West threatens to ‘pull out’ from ‘Yeezy Gap’ deal

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TOPLINE

During his first presidential campaign rally on Sunday, Kanye West threatened to “pull back” from lucrative deals his fashion brand Yeezy struck with Adidas and Gap Inc., causing Gap Inc. shares to fall nearly 6% Monday.

HIGHLIGHTS

West covered a wide variety of topics at the South Carolina rally, including the lack of black representation on boards, and said he was not on the Adidas board or of Gap Inc. and that “that has to change today or I walk one way.” “

Shares of Gap Inc. opened at $ 12.64 on Monday and fell to $ 11.92.

When news broke on June 26 about the “Yeezy Gap” collaboration, which is slated to hit stores and online in 2021, Gap Inc.’s stock jumped 42%.

Gap has been hit hard by the pandemic, a quarterly report filed with the SEC in June found the retailer had to temporarily shut down around 90% of its global stores and its year-to-date cash flow was $ 1.1 billion compared to a negative amount of $ 136 million last year.

Under the terms of the agreement, West owns 100% of the Yeezy brand, which generated estimated sales of $ 1.3 billion in 2019, and Gap Inc. retains sole ownership of the Gap brand.

It is not known whether West can actually “go away.”

crucial quote

“Risk or no risk of losing any possible deal, I’m not a board member of Adidas. I am not a member of the board of directors of Gap. And that has to change today or I’m leaving, ”West said.

large number

$ 1 billion. By 2031, this is what Gap Inc. hopes ‘Yeezy Gap’ will generate in annual sales, source revealed New York Times.

tangent

The entrepreneur and musician, who Forbes estimated to have a net worth of $ 1.3 billion, worked at a Gap store in Chicago as a teenager, and started his Yeezy shoe and clothing lines decades later. In an interview with The Cut in 2015, West said he would like to be “the Steve Jobs of the Gap”.

Surprising fact

Adidas stock was less affected by the threat from West, it opened at $ 137.20 and fell only to $ 136.99.

news peg

South Carolina Election Commission officials confirmed Newsweek that West missed the deadline to appear on the state ballot. Applicants must file documents in 33 states to be eligible for registration and nine states do not allow applicants for registration at all. West has already missed a number of entry deadlines, including in Florida, Michigan and North Carolina. West filed his first official documents last week in Oklahoma, qualifying to run as an independent in the November ballot, according to a spokeswoman for the state electoral board. A source said People this wife Kim Kardashian West and other family members are concerned about West’s mental health. In the past, West and Kardashian West have spoken about her bipolar diagnosis.

further reading

Gap stocks rise after clothing deal with Kanye West’s Yeezy (Forbes)

Kanye West and Gap sign 10-year contract for the “Yeezy Gap” clothing line (New York Times)

Kanye West Says He’s Done With Trump – Opens Up About White House Offer, Biden Damage And All (Forbes)

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