Wells Fargo Analyst Says Gap Could Bring In $1B In Sales From Kanye West Yeezy Brand. In this Nov. 6, 2019, file photo, Kanye West attends the WSJ. Magazine 2019 Innovator Awards at the Museum of Modern Art in New York. The rap superstar will design adult and kids' clothing that will be sold at Gap in 2021. Yeezy is best known for pricey sneakers that sell out online quickly. But Yeezy footwear, made with sneaker company Adidas, won't be sold at Gap. (Photo by Evan Agostini/Invision/AP, File)
Kanye West has the billion-dollar touch – and according to financial analysts his Yeezy brand collaboration with Gap is projected to benefit from it. Not only was the iconic hip-hop MC officially declared a billionaire by Forbes last year, Gap’s pending Yeezy line could do a billion dollars in sales it’s first year, CNBC reported.
The analysis was made by Wells Fargo and touted by its analyst Ike Boruchow after Gap did a limited release of the popular apparel brand’s first piece in the line – a bright blue puffer jacket that retailed for $200.
“Now that this catalyst is here, the majority of questions we are fielding regarding Gap is around how powerful this partnership with Yeezy could be — which is why we thought it would be helpful to put numbers behind the initiative,” Boruchow said in a memo to clients, Wednesday, June 30.
The jackets were already being resold on retail sites for $1,000 or more though they haven’t even shipped yet, according to CNBC.
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To gauge the impact West’s Yeezy line would have on Gap sales, Wells Fargo surveyed 1,000 consumers – a mix of current (530) and non-Gap customers (470). It was a requirement that participants knew who West was.
According to the data, 64% of current Gap customers planned to purchase items from the collection and spend at least $178 on items. For the non-Gap customers, 23 percent said they planned to purchase products from the line, spending at least $126 dollars. Seventy-five percent of the non-Gap customers also said they’d likely buy other Gap items while shopping.
As a result of the findings, Wells Fargo estimated the Yeezy Gap line could do at least $990 million in revenue or more. “This does not account for new customers or higher Gap spend among existing customers due to the ‘brand halo’ that Yeezy may bestow on the Gap brand and broader assortment — similar to what Yeezy did for Adidas beginning in 2015,” Boruchow continued in his memo.
Gap’s stock has also seen a major increase since the collaboration with West was announced. Not only was it up 1.6% in afternoon trading yesterday, it also rose over 64% year-to-date. Wells Fargo believes the Yeezy line could add $1.50 per share to earnings by 2026.
