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How Much Is Yeezy x Gap Worth?

Before a single item of the long-awaited Kanye West-Gap partnership gets released later this year, both parties might already be celebrating. A report from Bloomberg citing UBS Group analysis indicated that the hotly anticipated pairing could be worth as much as $970 million.

The Yeezy brand on its own is valued within a range of $3.2 billion to $4.7 billion by the investment bank, according to a private document reviewed by Bloomberg. Last year, the hip-hop star and failed presidential candidate made a huge splash with the announcement that the brand signed a 10-year agreement to design and sell clothes for men, women and kids under the Yeezy x Gap label.

During a fourth-quarter earnings call, Gap Inc. CEO Sonia Syngal said she spoke with West this month, assuring analysts that he’s “very, very focused on this incredible opportunity.”

“The entire Gap team are heads down and believe this to be a very big potential for us,” Syngal said in the call.

Gap anticipates its Yeezy line, which it plans to launch in the first half of the year, to hit $172 million in sales in its first full year in 2022. But the specialty retailer has far greater ambitions for the brand, with UBS pointing out that it has an upside in excess of $1 billion in sales as soon as 2023. This figure would already be half of the $2 billion that Gap projects for sales at its Athleta brand in the same year.

Few details about the line have been released, though West has teased colorful hoodies and fleeces via his own personal Twitter account and through the @Yeezyxgap Instagram handle. Gap has described the collection as “modern, elevated basics.”

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Last July, West tweeted from his ranch in Cody, Wyo., where some of the Yeezy brand’s manufacturing operations take place. In the six-second video, a model was being fitted in a pair of utility trousers, while several pieces from the presumed collection were shown front and center on a concrete floor, including vibrant orange hoodies, tie-dyed swimming kits, a neon-yellow fleece, and shorts and tops in both neon and pastel hues.

In October, a compilation of product images shared by Twitter user @_alchimist highlighted eight potential Yeezy x Gap products, including a T-shirt, a supply hoodie, a flight jacket, a roper boot, a transporter bag, a windbreaker and a version of the futuristic, 3D printed foam runner. While the transporter bag has been showcased on a @Yeezyxgap Instagram post, none of the products have been officially confirmed.

In October, a compilation of product images shared by Twitter user @_alchimist highlighted eight potential Yeezy x Gap products, including a T-shirt, a supply hoodie, a flight jacket, a roper boot, a transporter bag, a windbreaker and a version of the futuristic, 3D printed foam runner.

And on top of that, the Yeezy x Gap deal exclusively sells apparel and accessories, excluding footwear entirely, which is reserved for Adidas and the Yeezy Supply e-commerce site. This suggests that either the post could have been a fake mockup altogether, or encompasses products across both the Gap and Adidas collections.

Regardless of what products are launching in the collection, Gap Inc. execs are likely pleased with the value of the Yeezy x Gap collaboration, particularly as the retailer has been looking for answers as to how to revitalize the Gap brand for years now. In the fourth quarter, Gap brand global net sales were down 19 percent and comparable sales sagged 6 percent, weighing down the company’s total sales across its Gap, Banana Republic, Athleta, Jack and Janie and Intermix banners at a 5 percent loss.

However, Gap Inc. did see net income swing back in the positive, improving to $234 million in the quarter from a net loss of $184 million in the year-ago period. And if there’s one major positive the specialty retailer can build on, it’s that it saw more than $6 billion in sales online throughout 2020.

Although Gap’s deal with Yeezy is exclusive to apparel and accessories, the retailer can learn a thing or two from the footwear hype train that West’s brand brings to the digital table. Case in point: the $200 Adidas Yeezy 450 Cloud White sold out just one minute after its 7 a.m. launch on Yeezy Supply on March 6.

Resale prices of the high-demand silhouette have hovered upwards of the $400s for many sizes in the days since, with a size-12 in men’s selling for as much on $534 on the Goat marketplace on the morning of March 18.

UBS, which prepared its document in February, said that the business was growing at a “staggering clip.”

“With an obsessive attention to product detail paired with a disciplined approach to volume management, there exists a significant runway for continued growth within this partnership and the footwear segment,” the UBS report said.

West’s shoe deal with Adidas remains his largest asset, churning out a constant string of limited-edition sneaker drops that routinely sell out. But what’s perhaps been the most tantalizing aspect of the Adidas relationship for West is that he still retains sole ownership and creative control of the Yeezy brand. The Yeezy-Adidas partnership is in place until 2026.

The continued success of the Yeezy brand will be especially significant for West personally. Under the terms of the agreement with Gap, West earns royalties on sales, and his rate increases as the business grows. Plus, he’ll get stock warrants as the line hits sales targets, with the highest set at $700 million, according to a securities filing.

An unaudited balance sheet of West finances provided to Bloomberg by his lawyer includes another $122 million in cash and stock and more than $1.7 billion in other assets, including a significant investment in Skims, Kim Kardashian’s underwear label. West’s entire music catalog is worth $110.5 million, according to a 2020 valuation by Valentiam Group.

The final months before the Gap launch come amid a breakup with Kardashian, West’s spouse of six years, who filed for divorce in February.