Celebrity rapper Kanye West, now known as Ye, is expected to terminate his contract with clothing company Gap Inc. His lawyer shared a letter with a news outlet that spoke of the termination due to contract violations. The letter was sent on Thursday, although Ye has publicly shared his grievances against business partners. Gap shares fell by four percent in pre-market trading.
The letter shared by lawyer Nicholas Gravante with CNBC claimed that Gap had taken no action on the brand’s concerns. He said that Ye’s brand Yeezy had notified the clothing company of its concerns in August. It had given Gap “a contractually-designated 30 days to cure its breaches.”
The companies’ agreement included the creation of dedicated Yeezy Gap stores as well as distribution of Yeezy products in Gap stores by the second half of last year. Ye’s lawyer also said that non compliance by Gap had cost Kanye and that he would move forward and open Yeezy retail stores to make up for the time that was lost. The partnership that came into being in June 2020 was expected to continue till 2026.
Yeezy is a sole proprietorship company that is owned by Kanye West. According to the agreement, it would have received both royalties as well as equity that was based on sales at Gap. The clothing company also agreed that Yeezy would get 8.5 million shares as predetermined sales targets were met. Gap has been struggling as sales have been sluggish. In July CEO Sonia Syngal stepped down from her post. In August, the clothing brand cut its sales outlook. It also has to deal with issues plaguing its Old Navy business, a brand that used to drive the growth of the clothing company.
In a recent interview with Bloomberg, Ye spoke of dropping two major brands: Adidas and Gap. The celebrity rapper declared that the time for him “to go alone” had come.
Neither Gap nor Adidas have commented on Kanye West’s letter or since deleted posts on social media.
YE SENT NOTICE OF TERMINATION TO GAP pic.twitter.com/WFAGbnXh82— YEEZY MAFIA (@theyeezymafia) September 15, 2022
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