By Suzanne Kapner 

Gap Inc. is betting that the perfect hoodie and other clothes designed by music and fashion impresario Kanye West will help pull it out of its yearslong slump.

The casual-clothing retailer is teaming up with Mr. West's fashion brand Yeezy on a collection called Yeezy Gap that will debut next year, according to the companies. Yeezy will receive royalties and potential equity based on meeting sales targets.

News of the arrangement sent Gap's battered shares surging roughly 30% in Friday trading. The gain added more than $1 billion to the company's market capitalization. The stock is still down more than 25% year to date.

Mr. West, who has 21 Grammy awards and whose Yeezy fashion brand had a tie-up with Nike Inc. and currently has one with Adidas AG, has talked about wanting to partner with Gap in various interviews over the years. He worked in a Gap store while growing up in Chicago and even rapped about the retailer in his 2004 song "Spaceship."

"I believe that Yeezy is the McDonald's and the Apple of apparel," Mr. West told The Wall Street Journal in March. "In order to make the Apple of apparel the next Gap, it has to be a new invention. To invent something that's so good that you don't even get credit for it because it's the norm."

Gap rose to fame in the 1990s by dressing a generation of Americans in its khakis and T-shirts, but has since been overtaken by fast-fashion chains and new e-commerce players. Its sales have declined each year since 2013, dragging down results at parent Gap Inc., where its new chief executive, Sonia Syngal, is trying to fashion a turnaround in the middle of a pandemic.

Ms. Syngal told the Journal in May that she is using the upheaval created by the coronavirus pandemic "to refashion the company for what we want it to look like over the next 50 years."

Mr. West, who is married to media phenom and entrepreneur Kim Kardashian West, has long held fashion aspirations. In 2009, he interned at the Italian fashion house Fendi. His high-end line of Yeezy sneakers for Adidas, first introduced in 2015, are released in limited quantities and quickly sell out. In contrast, the Yeezy Gap collection will be widely distributed in stores around the world and online.

As recently as 2018, he had hoped to become artistic director of Louis Vuitton menswear. After some false starts, Yeezy returned to the fashion runway this year with a show in Paris that garnered positive reviews.

At Yeezy's Cody, Wyo., studio, Mr. West has been working on perfecting the hoodie. His version is chunky and slightly cropped at the waist. "The hoodie is arguably the most important piece of apparel of the last decade," Mr. West told the Journal in March.

A version of the hoodie -- along with T-shirts and jeans for men, women and children -- will be available beginning next year. Prices will be in line with Gap's other offerings, according to a company spokeswoman.

Brands are increasingly teaming up with musicians and other celebrities as they struggle to stay relevant. Last year, the singer Rihanna partnered with LVMH Moët Hennessy Louis Vuitton SE to create a new label called Fenty, while Lady Gaga signed a deal with Amazon.com Inc. to create a beauty collection for the online retailer.

Gap Inc., which also owns the Old Navy and Banana Republic brands, swung to a $932 million loss in the three months to May 2, a period when 90% of its more than 3,300 stores around the world were closed due to the coronavirus pandemic. Sales fell 43% to $2 billion.

As stores reopen, Gap is squabbling with landlords, including Simon Property Group, the country's largest mall owner, over unpaid rent. Even before the pandemic, the Gap brand had been closing stores and analysts expect it to shrink further.

Write to Suzanne Kapner at Suzanne.Kapner@wsj.com

 

(END) Dow Jones Newswires

June 26, 2020 12:25 ET (16:25 GMT)

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