scorecard
  1. Home
  2. stock market
  3. news
  4. Gap surges 42% after striking 10-year deal with Kanye West and Yeezy

Gap surges 42% after striking 10-year deal with Kanye West and Yeezy

Theron Mohamed   

Gap surges 42% after striking 10-year deal with Kanye West and Yeezy
Stock Market1 min read

  • Gap stock surged as much as 42% on Friday after the clothing giant said it struck a 10-year partnership with Kanye West and his Yeezy fashion brand.
  • West is set to design a "Yeezy Gap" clothing line to be sold in stores and online next year.
  • Gap is targeting $1 billion in annual sales from Yeezy Gap in five years' time, The New York Times reported.
  • Visit Business Insider's homepage for more stories.

Shares in Gap soared as much as 42% on Friday after the apparel retailer announced a 10-year partnership with Kanye West and his Yeezy fashion brand.

The celebrity rapper, music producer, and entrepreneur will design a "Yeezy Gap" line of affordable adult and children's clothing that will be sold in Gap stores and online next year, Gap said.

The stock-price increase added more than $1 billion to Gap's market capitalization, lifting it to about $4.8 billion as of 11:20 a.m. ET.

However, Gap stock is still down more than 20% this year.

Read more: The chief strategist of $2.5 trillion State Street recommends 7 ETFs for investors looking to profit from a permanently altered post-coronavirus landscape

Gap, which also owns Old Navy and Banana Republic, is hoping the line will generate $1 billion in annual sales after five years, The New York Times reported. The Gap division reported $4.6 billion in net sales last year.

West already collaborates with Adidas on Yeezy sneakers. Bank of America valued Yeezy's shoe business at $3 billion and expected it to earn $1.3 billion in sales last year, The Times said.

West, who worked at a Gap store as a teenager, told The Cut in 2015 that he would like to be "the Steve Jobs of the Gap."

Gap said West would receive royalties and possible equity tied to the sales performance of Yeezy Gap.

Read more: From a late-night infomercial to a 1,040-unit empire worth $188 million: Here's how Jacob Blackett perfected his real-estate-investing strategy after losing $70,000 on his first deals

READ MORE ARTICLES ON


Advertisement

Advertisement