A $200 blue puffer jacket is the first item from rapper Kanye West’s Yeezy Gap collection. Gap Inc. is the source of this information. According to a Wells Fargo research, Gap’s planned Yeezy line with artist Kanye West may bring in roughly $1 billion in additional sales next year. “Now that this catalyst is here, the majority of inquiries we are hearing on Gap revolve around how effective this partnership with Yeezy could be,” Wells Fargo analyst Ike Boruchow said in a note to investors on Wednesday. Gap debuted the first item from the highly anticipated range earlier this month, offering buyers a taste of what’s to come. The vivid blue nylon puffer jacket, which retailed for $200, was only available for a limited period. The coats are now being sold on resale sites for more than $1,000, despite the fact that they have yet to be delivered. It’s unknown when other Yeezy/Gap items will be released, but a more comprehensive lineup is expected later this year. Last week, Wells Fargo conducted a survey of 530 Gap customers and 470 non-Gap consumers to gauge their interest in the Yeezy brand in order to quantify what the relationship could imply for Gap. The poll was done in collaboration with the data firm Guidepoint. According to Wells Fargo, participants needed to know who Kanye West is. Sixty-four percent of Gap shoppers said they planned to purchase things from the cooperation. In the first year of the line’s release, they planned to spend an extra $178 on Yeezy merchandise on average. 23 percent of respondents who don’t shop at Gap said they planned to do so in the future and expected to spend an extra $126 at the store. 75 percent of those who don’t already shop at Gap but plan to buy Yeezy products said they anticipate to buy other Gap products while they’re there. This shows that the partnership has the potential to attract new Gap customers, according to Boruchow. According to Wells Fargo, the Yeezy brand may bring in $990 million in sales for Gap in fiscal 2022, boosting profitability by 50 cents per share. According to Wells Fargo, the alliance may boost earnings by $1.50 per share by fiscal 2026. One reason is that experts predict the Yeezy items to have a margin rate of around 50%, which is high for apparel considering that the majority of it will be sold at full price. “This does not account for new customers or increased Gap expenditure among existing customers as a result of the ‘brand halo’ that Yeezy may bestow on the Gap brand and broader range — similar to what Yeezy accomplished for Adidas beginning in 2015,” Boruchow wrote in his note. Gap’s collaboration with West has been formally announced for a little over a year now. Gap expects that by announcing the arrangement, it would gain momentum in attracting new customers and enticing long-time customers to visit its stores more regularly. Gap’s stock was up less than 1% on Wednesday morning. To date, the stock has increased by more than 64%. Gap has a market capitalization of $12.6 billion dollars./n
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