When news broke that Kanye West, now officially known as Ye, intended to prematurely end his ten-year contract with Gap, it seemed like the grumpy kid packing his toys to play elsewhere.
The official termination letter was sent by Ye’s attorney on Thursday, September 16 but not before Ye announced via social media that he plans to open a chain of Yeezy stores, starting in Atlanta and expanding across the United States and then the world.
He also said he intends to leave his current partnership with Adidas when it expires in 2026, saying it is time for him to do so on his own. “No more companies standing between me and the public.”
Gap President Mark Breitbart immediately sent an email to all Gap Inc employees. Which indicates that the decision was a joint decision.
“While we share the vision of delivering utilitarian, high-quality, on-trend design to all people through unique holistic experiences with Yeezy Gap, How We work together to achieve this incompatible vision. The email was mentioned in a copy shared by Gap.
Ye claims that Gap did not meet the terms of its agreement, specifically to sell 40% of Yeezy Gap’s clothing in brick-and-mortar stores and to open five Yeezy stores by the end of July 2023.
In this regard, Breitbard said: “It is important to know that during this partnership, we have lived up to our commitments.”
“The teams have done so with the utmost integrity, overcoming obstacles and showing incredible determination,” he added. This says a lot about how Gap perceives you in their working relationship, i.e. not very well.
At first glance, it appears to be a “suits versus designs” debate. And with so much money hanging in the balance — ending the Adidas deal alone threatens to take Ye off the billionaire leagues, according to Forbes — Ye appears to be cutting his nose to spite his face.
vision not money
But this is not about the money for you. It is about vision. “I am an innovator. I am fighting for a position to be able to change clothes and give people the best design,” he told Fox News in an interview.
On the other hand, Gap was dealing in a different currency, dollars and cents. And for that, Ye has proven his strength, so it doesn’t make sense for Gap to let him take Yeezy away and go on his own.
Gap needs to curl up and realize that Ye has exactly what is needed to revive the brand and bring it back to its cultural relevance. This is Yi’s vision, passion and energy, as well as pursuing enthusiastic and energetic clients.
Early in the partnership, Yi requested a seat at the Gap board table. The company rejected the proposal.
“Honestly, he couldn’t do a worse job than what the board of directors has already done,” said retail analyst Neil Saunders of GlobalRetail at the time. They oversaw the decline of what was once an American icon.
Claiming that the board of directors is made up of too many beans, Saunders continued, “These people shouldn’t be running the company because they’re boring. You need people who understand brands, customers, and societal trends. You need people with vision.”
Gap problems are getting worse
Unfortunately, those beans have far fewer beans to count these days.
Since 2005 when the Old Navy brand of Gap Inc. The sales gap, after dropping from $7.2 billion in 2004 to $6.8 billion in 2005, has remained stagnant. The two brands ran straight until 2015, then Old Navy took off and Gap losses increased.
By 2021, Gap brought in less than half of Old Navy revenue, and $4.1 billion to Old Navy’s $9.1 billion.
Of course, the high-flying Old Navy has been on the slide lately as well, with revenues for the first half of 2022 down 15% from the same period last year, dropping from $4.7 billion to $3.9 billion this year. The gap is only 10%, dropping from $1.9 billion to $1.7 billion.
And amid all the other problems Gap Inc. is facing. She has to find a new CEO after leaving Sonia Syngal last July. I held this position for just over two years, having headed the Old Navy for nearly four years.
Syngal exited after appointing Horacio Barbeto to head Old Navy, replacing Nancy Green, who left last May. Barbetto has worked with Walmart for 26 years, as President/CEO of Walmart Argentina, Chile and most recently Walmart Canada.
The email that Brietbard sent to employees said his plan was to bring the brand back to what it was originally known for – “be bold, hack, obfuscate.” This was exactly what Ye and Yeezy offered.
The gap between the two seems too wide to bridge. But Gap should have taken Yi at his word and not try to put him in a box when he made it clear that he would never stay there.
“This is not celebrity marketing. This is not a collaboration,” he told a group of Gap executives. “We have to be the top energy brand in the mall. I love Gap… You really have to give me the place to be Ye and do what I think or I’ll do what I think somewhere else… This is the moment. There will never be that chance where a guy like me cares so much about this particular brand and who did it, up until this point… This is bigger than us and we shouldn’t argue amongst ourselves.”
We hope Gap fixes things quickly. As disturbing as the turmoil is, Ye is just the turmoil Gap needs.