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Kanye West's collaboration with Gap is a success for the brand

2021-08-29T21:03:53.562Z


Gap is having a successful quarter thanks in part to its collaborations with artists like Kanye West, in his $ 200 Yeezy jacket.


Kanye West uses a stadium as a recording studio 1:03

(CNN Business) - 

Gap's remarkable turnaround under the leadership of Sonia Syngal continues, thanks in part to Kanye West, TikTok and Simone Biles.


Shares in Gap rose about 3% this Friday morning after the retailer reported that its revenue and sales for the most recent quarter beat forecasts and issued an optimistic outlook for the remainder of this fiscal year.

The shares soared almost 35% in 2021.

Syngal, the former head of Gap's Old Navy unit, took over the leadership of the entire company in March 2020. At the time, Gap was in dire straits.

He had just decided to abandon the Old Navy spin-off plans.

Banana Republic was still having problems.

And Gap's flagship brand was in need of a youth fashion makeover.

Then the pandemic hit, and Gap faced a liquidity crisis due to store closures.

  • Gap to close all its stores in the UK and Ireland

And Kanye arrived.

The rapper announced a 10-year collaboration with Gap for a Yeezy-branded clothing line in June 2020 ..., though he briefly threatened to leave it a month later.

The first piece in that collection, a $ 200 jacket, will begin shipping to customers this fall.

Pre-orders have already started in North America, Tokyo and Europe.

Apparently, the demand has skyrocketed.

During a conference call with analysts Thursday night, Syngal said that "it has had a great response. We have had a much younger clientele. 75% of those customers are new to the Gap brand. So we are excited about the launch. ".

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Beyond Kanye, Syngal said Gap has benefited from strong demand for all of its clothing as consumers "embraced summer with optimism."

"We saw a celebration of American style, of '90s nostalgia and the revival of denim. All of this is in a good time," he said.

The hoodie returns with force

There has also been a resurgence of the Gap hoodie, which, according to Syngal, was fueled in part by TikTok's viral videos.

"Our classic Gap hoodie is having a moment, so much so that we reissued it in vintage brown for pre-sales this fall," he said during the call, adding that there are "high search levels" for it on Google and that Sales of the teen version of the sweatshirt are vastly outpacing adult sizes.

"This is a brand that is resonating. It is a brand that interests people and that they want to wear with pride on their chest," he said.

The Athleta de Gap sports brand is also a huge success.

Sales increased 27% compared to the same quarter of 2019 ... before the pandemic.

Athleta signed a deal with Olympic gymnastics legend Simone Biles earlier this year, wresting it from Nike.

Gap hopes that partnering with Biles will help Athleta "really start to gain traction with women," Gap CFO Katrina O'Connell said on the conference call.

  • Simone Biles' sponsors maintain their support after her departure from competition at the Olympic Games

All of that is helping lift Gap's overall sales, which were up nearly 30% from a year ago and also up 5% from pre-covid levels in the second quarter of 2019.

The strength of Old Navy drove much of the success, as the brand's US sales account for more than 60% of Gap's total national revenue.

"Gap deserves credit for the way it runs Old Navy and has kept the brand fresh and interesting for buyers," Neil Saunders, GlobalData managing director, said in a report.

"This investment has paid significant dividends in the aftermath of the pandemic as Old Navy's collections of relaxed family wear at reasonable prices have resonated with consumers looking to renovate their wardrobes and equip their children for back to school," added Saunders .

Gap also said it expects Banana Republic, a business casual wear brand that has struggled for some time, to start to change this fall.

Sales were up from last year's pandemic levels, but were down 15% from the second quarter of 2019.

Still, analysts are surprised at how quickly Syngal has turned the company around.

"I don't think I've ever seen a speed of transformation like the one you've set in motion," Barclays analyst Adrienne Yih said on the conference call.

GAP Kanye West

Source: cnnespanol

All news articles on 2021-08-29

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