Yeezy x Balenciaga collection is Gap's second chance at luxury

Martine Paris, Bloomberg News

Kanye West attends the 2020 Vanity Fair Oscar Party following the 92nd annual Oscars at The Wallis Annenberg Center for the Performing Arts in Beverly Hills on February 9, 2020. , Jean-Baptiste Lacroix/AFP via Getty Images

Gap Inc. released its first collection on Wednesday of Yeezy streetwear from its collaboration with fashion house Balenciaga, marking the company’s second foray into high fashion.

It’s the latest drop from Yeezy, the apparel business of Kanye West, now known as Ye, with eight items available for sale on YeezyGap.com and Farfetch.com. First announced Jan. 7, the collection includes a denim jacket, hooded sweatshirts, T-shirts and fitted sweatpants. Prices range from US$120 to US$440. It marks Gap’s return to the luxury market since agreeing to sell its Intermix designer clothing business to a private equity firm last year.

The collaboration is part of Gap’s big bet on Yeezy. The company signed a 10-year deal with West to design and sell apparel for men, women and kids under the Yeezy Gap label. Gap, which also owns the Athleta, Banana Republic and Old Navy brands, is trying to reinvent itself and get a piece of the streetwear market, which is estimated to be worth US$185 billion according to PwC. Gap’s Yeezy deal is estimated to be valued at as much as US$970 million.

So far, customers are responding. In a Nov. 23 earnings call with investors, Gap CEO Sonia Syngal said the Yeezy Gap hoodie from an earlier collection delivered the most sales by a single item in since the company launched its e-commerce website. More than 70 per cent of those shoppers were first-time customers, and the partnership is “unlocking the power of a new audience” which includes those from both Gen Z and Gen X, she said.

David Swartz, an analyst at Morningstar Investment Service said that the project may bolster Gap stores, but are unlikely to have a big impact on the parent’s overall business.

“Gap Global, the part of the business that owns Gap, has been in decline for 20 years, so anything they can do to reverse that trend and stabilize would be good,” he said.

While Yeezy has had success with his footwear line with Adidas AG, Swartz wasn’t sure whether that would translate to apparel. “There’s a lot more collectibility in footwear, which is a well-established market.”

Gap is competing against streetwear brands such as Supreme, which VF Corp. acquired last year for US$2.1 billion.