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GAP Teamed Up With Kanye West To Launch A New Clothing Line

GAP Teamed Up With Kanye West To Launch A New Clothing Line

American clothing retailer Gap Inc. has entered into a multi-year partnership with rapper and fashion designer Kanye West to create a new clothing line under the Yeezy brand, according to a joint press release from the parties.

As part of the collaboration, the Yeezy team, led by West, will develop basic clothing for men, women, and children that will appear in Gap stores and on the site in 2021.

The financial terms of the deal were not disclosed, but the parties' statement notes that Yeezy will receive royalties and will be able to participate in Gap's equity, depending on sales results. West will retain full control of the Yeezy brand, which is valued at $2.9 billion as of April 2020.

The partnership deal will last ten years and might be extended five years later, the New York Times reported, citing knowledgeable sources. According to them, Gap expects that sales of the new clothing line five years after the agreement will bring about $1 billion a year.

Gap, which also owns the Old Navy and Banana Republic brands, recorded a loss of $932 million in the three months to May 2, during which 90% of the more than 3,300 stores it owns worldwide were closed due to the coronavirus pandemic. Revenue fell 43% to $2 billion.

Gap shares are up 28.3% in Friday trading on the back of news of the partnership with West. However, since the beginning of this year, the company's capitalization has fallen by 26.1% and is now about $3.8 billion.