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Shares of the Gap tumbled as much as 7.4 percent Monday after Kanye West threatened to kill its fledgling partnership with his Yeezy brand unless he was given a spot on the company’s board. The rapper-turned-politician issued a similar ultimatum to sportswear giant Adidas — which produces his label’s sought-after sneakers — in a rambling …
Shares of the Gap tumbled as much as 7.4 percent Monday after Kanye West threatened to kill its fledgling partnership with his Yeezy brand unless he was given a spot on the company’s board.
The rapper-turned-politician issued a similar ultimatum to sportswear giant Adidas — which produces his label’s sought-after sneakers — in a rambling speech at his first 2020 presidential campaign rally over the weekend. West, 43, said he would “walk away” from both companies unless they put him on their corporate boards.
“In risk or no risk of losing whatever deal possible, I am not on the board at Adidas. I am not on the board at Gap,” West said at the Sunday evening event in South Carolina. “And that has to change today, or I walk away.”
It’s uncertain whether the “Closed on Sunday” artist will make good on his threat. But if he does, it could spell the premature end of a partnership that Gap expected to generate $1 billion in annual sales after five years, according to The New York Times.
It’s also not clear whether Gap or Adidas have considered adding West to their boards. Adidas declined to comment on West’s remarks 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 “elevated basics,” set to hit stores next year. Under the deal, Gap agreed to pay Yeezy — which West solely owns — royalties and potential equity related to sales performance.
Yeezy’s Adidas sneakers business is no small operation, either — Bank of America valued it at up to $3 billion last year, according to Bloomberg News, and Forbes estimates that it raked in $1.3 billion in revenue in 2019.
But West’s ultimatum did not hurt the German conglomerate’s stock price. Its Frankfurt-listed shares ended the day up 1.8 percent at 242.20 euros ($277.07).
Gap separately announced plans Monday to require customers to wear masks in its North American stores starting Aug. 1 amid a spike in coronavirus cases. Other retail giants such as Target, Walmart and CVS have rolled out similar mandates.
Gap shares were off 4.1 percent at $12.36 as of 1:21 p.m.
