Kanye West Finally Lands Dream Job Working For Gap

What we can learn from Gap’s ‘next-level’ partnerships to drive strategic retail growth

David Leibowitz
Jun 29, 2020 · 6 min read
Kanye West performing at South by Southwest on March 22, 2009, in Austin, Texas. Photo by 3CENT (cropped) / CC BY 2.0

a 2015 interview with Style.com, Kanye West said, “One of my dreams is to be the head creative director of the Gap. I’d like to be the Steve Jobs of the Gap.” West may have finally achieved that dream with the June 26th announcement of his 10-year partnership with Gap Inc., which owns brands Old Navy, Banana Republic, Athleta, and Intermix.

The deal between the retailer and Kanye West may seem unnatural. Still, it is just one of several examples by the company in recent months demonstrating a desire to reinvent themselves with new brand logos, expansion into product categories beyond apparel, and investments in re-commerce.

“I hate the concept of limited edition,” said Kanye West. “I’m here to help the 14-year-old version of myself that couldn’t afford shit.”

As the news broke last Friday, Gap and Kanye West were trending on Twitter. And Wall Street took notice too. Gap stock surged up 42% on news of the deal and the soon to be released new line, YEEZY Gap. The tie-up with West is far from a publicity stunt, as he is no stranger to fashion. Kanye has had a footwear deal with Adidas since 2013, which achieved $1.3 billion in sales in 2019, according to Forbes.

This “next-level retail partnership,” as described in a company press statement by Mark Breitbard, Global Head of Gap Brand, has an option to renew in five years. At that point, the company hopes to be generating $1 billion in sales from the venture, as reported by the New York Times. For a company with $4.6 billion in annual sales, they see this as a tremendous growth opportunity.

Will the YEEZY Gap line drive customers to a higher couture price point or offer limited edition styles? Not likely, according to Kanye’s Style.com interview. “I hate the concept of limited edition completely. I hate the concept of separatism. Elitism. Classism. We’re all equal,” said West. “I’m here to help the 14-year-old version of myself that couldn’t afford shit.”

Diversification is a crucial retail growth strategy

Gap was founded in 1969 in San Francisco and now operates about 3,200 global company-operated and franchise locations, but they’ve primarily stayed the course with apparel. Athleta is a recent stand-out that competes in the lucrative athleisure category against the likes of lululemon. In comparison, Gap and Banana Republic have waned with dwindling mall traffic and as a victim of cannibalization by their own moderately priced product sold at Old Navy stores.

Photo by Alex Bierwagen on Unsplash

Gap has evolved since the early days of hawking denim jeans, but they’ll need another metamorphosis. Consumer brands and retailers can no longer be content to remain in niche categories. Even pre-pandemic, it was hard to picture the future of retail stores that exclusively sold single product categories like The Container Store, Batteries Plus, or Bed Bath & Beyond.

Most of the items carried by these specialty retailers (aside from batteries) are non-essential and can be picked up from mass merchants like Walmart or Home Depot as consumers fill shopping carts with other items on their trip. And although batteries may be essential, the category is dominated by online competition. Data management company 1010data found that Amazon was already responsible for selling 94% of batteries online in 2016.

Last year, Gap was investigating clever organization splits rather than growth opportunities for the business. In February 2019, they announced plans to spin-off Old Navy (earning half of the company revenue at the time). As reported by Fortune, they were focused on expensive “financial engineering” rather than anything that would improve the brands.

They later reversed that decision in January 2020, which allowed them to target their sights on product and reaching customers — far better growth strategies for building brand value than simply spinning off business units.

It’s now no wonder that a company like Gap is looking to expand beyond its staples of ready to wear.

“It is possible to do good for the planet while being good for business”

Gap gets into home, again

In May, Gap announced another partnership to help them extend into brand new product categories. According to the company, licensing company IMG will deliver cross-category expansion to increase existing consumer touchpoints while engaging with and introducing new audiences.

The category expansion includes baby equipment and baby care, home décor, textiles, and furniture. These various home products may allow them to compete with retailers like Williams-Sonoma, which owns stores with its namesake brand as well as Pottery Barn and West Elm.

Interestingly, Pottery Barn was sold by Gap to Williams-Sonoma in 1986, so the retailer could concentrate on its apparel stores. Now, product diversification is Gap’s new steer for growth.

The home décor and furniture deal with IMG “presents a unique opportunity for us to bring our fashion and lifestyle brands to life in new ways for customers around the world, while still maintaining the creative integrity that make each of our brands so distinctive and recognizable in the marketplace,” said Roy Hunt, who leads Gap’s strategic partnerships.

Partnerships to achieve sustainability goals

Another announcement made in February isn’t related to a product category but instead positions Gap as a leader in sustainability with partner thredUP. According to the company, thredUP is the world’s largest fashion resale-as-a-service platform and allows customers to diversify their closets with new clothing, rental pieces, or secondhand goods.

In thredUP’s annual Resale Report, the equivalent of one garbage truck of textiles is landfilled or incinerated every second, and 56 million women bought secondhand products in 2018, representing nearly half of the entire female adult population in the United States. According to a company statement, Gap has a goal of diverting more than 30 million pounds of material annually from landfills, while lowering business costs, and supporting industry-wide change.

This alliance is important for Gap because it demonstrates that it is possible to do good for the planet while being good for business: thredUP says the resale economy is worth a whopping $50 billion.

Expand, and stay true to your brand

Customer behaviors and expectations are changing at light speed. Retailers need to adapt to maintain relevancy and to meet customers wherever they are. To retain savvy customers, however, those expansions must stay true to the brand.

YEEZY Gap promises to deliver modern, elevated basics for men, women, and kids at accessible price points, according to the company press release. If Gap keeps to this mission statement of accessibility, their IMG furnishings deal should offer a moderately priced alternative to Pottery Barn.

Fundamentally, Gap demonstrates that alliances are about increasing basket size (selling more differentiated products to existing customers) or acquiring new customers and exposing them to an array of product offers. Bruno Maglione, President of Licensing, IMG sums it up, “Gap Inc. recognizes this omnichannel opportunity and the power of its brands to attract existing and new consumers from more than one angle and via more than one format.”

For a company that has been laser-focused on a single category differentiated mainly by price point, the partnerships signal the future of retail growth through seemingly unnatural alliances. Expect to see more bold moves of this type as others in the retail industry explore new routes to revenue through partnerships, rather than investing in new physical storefronts.

Though it remains to be seen if these ventures will bear fruit, the YEEZY founders’ deep experience in retail may add distinct value. Kanye West once worked in a Gap store as a teen growing up in Chicago.

Source footnote:
Conde Nast sold Style.com in 2017, and the site is now defunct with all content removed. Archives of the interview with Kanye West can be found here.

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David Leibowitz

Written by

Breaker of treadmills. Contributions in XBOX Mag, Forbes, CNN, OneZero & industry rags. @ retail, CPG, health/wellness, education, culture & tech.

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +785K followers.

David Leibowitz

Written by

Breaker of treadmills. Contributions in XBOX Mag, Forbes, CNN, OneZero & industry rags. @ retail, CPG, health/wellness, education, culture & tech.

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +785K followers.

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