Kanye West's 'Brilliant' Yeezy Gap Line Could Earn Millions Due To 'Unprecedented Deal'
Kanye West may be running for president in the 2020 election, but that doesn't mean that the "Stronger" rapper has strayed from the fashion world. After signing a 10-year deal with the Gap that will arrive in stores in 2021, how much can the designer possibly make from the "unprecedented deal" and what effect could it have on the clothing company?
After news of the new Yeezy x Gap line emerged, Susan Scafidi, the founder of Fordham’s Fashion Law Institute, examined what this could mean for both the musician and the company.
Not only does Kanye's Gap deal include taking a salary or earning royalties on the line, but the Grammy Award-winning musician also has the opportunity to earn stock in the brand. As a result, West has the potential to earn one-third of 8.5M shares in the company if his apparel line can earn $250M in net sales during a single fiscal year. Furthermore, if the line makes $700M, he could potentially receive all 8.5M shares.
READ: Kanye West Could Run For President In 2020 Election If He Overcomes These 'Major Obstacles'
Calling the deal "brilliant," Scafidi told Complex that the upcoming line, which will include pieces for men, women, and children, could effectively elevate the company. She also stated that while the length of the decade-long deal is considered a very long collaboration, it could also increase the likelihood that the new Yeezy line succeeds and results in a high number of sales.
The current stock prices associated with the Gap are currently going for $11.12 USD, which signifies that West is entering a partnership with a company that is "a little distressed." However, this could work in his favor if shares increase to $50. If that did take place after the collection's 2021 release, he could eventually have the option to purchase the 8.5M shares at a discount of approximately 65%.
Is it possible for the Yeezy Gap line to eventually hit $250M in sales during the first year? It could happen, says Scafidi.
"It depends on the product. It depends on the product mix. It depends on how much product they put in stores. Because one of Yeezy's strategies has always been the Hermès Birkin strategy, right? Limited quantity, limited drops, never allowing supply to exceed demand. Gap is different. Gap is not about scarcity. And so, this is going to be a different strategy for Yeezy. But I think that with the right marketing, with the right product mix, yes, they could hit $250 million the first year, easy," she said.
© Copyright IBTimes 2024. All rights reserved.