Kanye West’s “Yeezy” Jacket is a Big Hit for Gap

(CNN Business) – Gap’s remarkable turnaround under the direction 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. I had just decided abandon 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 came the pandemic, and Gap was faced with a liquidity crisis due to the closing of stores.

And Kanye arrived. Rapper announced a 10-year collaboration with Gap for a Yeezy brand clothing line in June 2020 …., though briefly threatened to leave her one month after.

The first piece of that collection, a jacket of US $ 200, 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 clients are new to the Gap brand. So we are excited about the launch. “.

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, 90s nostalgia and the revival of denim. All of this is in a good time,” he said.

The hoodie is back with a bang

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.

Gap’s Athleta 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, snatching 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.

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.