A contract battle may be brewing for Kanye West and Gap. On the heels of West publicly accusing the American mall retailer of failing to make good on their collaborative Yeezy Gap deal, counsel for the rapper-slash-design-figure at Cadwalader, Wickersham & Taft LLP has sent a letter to Gap notifying it that West’s Yeezy LLC is terminating the parties’ rocky venture. As first reported by the WSJ on Thursday morning, West is looking to back out of the deal on the basis that “Gap breached the agreement by not releasing apparel and opening retail stores as planned,” namely by failing to offer up “40 percent of the Yeezy Gap assortment in brick-and-mortar retail stores during the third and fourth quarters of 2021.”
Additionally, counsel for Mr. West claims that San Francisco, California-headquartered Gap fell short of a provision in the agreement that the parties announced in June 2020, which required it “to open as many as five retail stores dedicated to showcasing Yeezy Gap products by July 31, 2023.” No such stores have been opened to date.
West shed light on looming issues between the two companies earlier this month, expressing his displeasure in a string of social media posts, stating, among other things, “I signed with both Gap and adidas because it contractually stated they would build permanent stores which neither company has done even though I saved both those companies.” (Counsel for West has not revealed whether he will take a similar stance in connection with his deal with adidas, which is slated to run until 2026.)
“Gap left Ye [with] no choice but to terminate their collaboration agreement because of Gap’s substantial noncompliance,” Nicholas Gravante, West’s attorney at Cadwalader Wickersham & Taft, said in a statement to the AP on Thursday, stating that “Yeezy notified Gap of its concerns in August and gave the company a contractually-designated 30 days to cure its breaches.” While West “diligently tried to work through these issues with Gap both directly and through counsel. He has gotten nowhere,” per Gravante, who also claims that Gap’s alleged “failure to comply with the terms of the contract has been costly.” (Gap reportedly sent a letter in response.)
In light of what could be the making of a fully-fledged legal battle (Gap has not yet publicly responded to news of West’s termination letter), “Items won’t disappear from stores. Gap will be able to sell existing Yeezy Gap products before ceasing to use the brand name, according to the letter,” according to the Journal’s report. Meanwhile, “West’s letter does not affect merchandise made in collaboration with fashion house Balenciaga that is also sold through Gap,” likely given that the tie up between West, Gap, and Balenciaga is governed by a separate contract and divergent terms.
As TFL has been tracking, the breakdown of the deal – which was slated to run for 10 years, with the option to renew after five, and was predicted to generate upwards of $1 billion in revenue for Gap, according to an early estimate from Wells Fargo – comes amid some hiccups on the branding side, with the U.S. Patent and Trademark Office (“USPTO”) taking issue with the mashup of Gap’s signature navy blue hue with Yeezy’s “YZY” mark. While a Yeezy Gap mark was registered by the European Union Intellectual Property Office in July, potential registrations in the U.S. have been a bit less straightforward. In fact, the three joint applications for registration that West’s Mascotte Holdings, Inc. and GAP (Apparel) LLC filed with the USPTO last year were suspended by the U.S. trademark body in June due to a conflict with Y.Z.Y., Inc., an unrelated company that previously filed an application for registration for a stylized Y.Z.Y. logo for use on “fragrances and hair care preparations.”
A formal split for West and Gap would likely put an end to the quest for domestic registrations for the Yeezy Gap marks – depending, of course, on the terms of any settlement.
As for West’s plans in the retail space going forward, he alluded to ambitions of going at it alone (i.e., sans Gap and/or adidas) early this summer by way of a handful of retail-centric applications for registration that his holding company lodged with the USPTO. In June, counsel for West’s company filed two intent-to-use applications for YEEZY SUPPLY for use in connection with “retail stores, retail store services, and on-line ordering services and on-line retail store services available on a global computer network, all of the aforesaid featuring clothing and accessories therefor, footwear, and headwear,” as well as various types of clothing. In July and August, those applications were followed up with additional applications for a mark that consists of “a fanciful design of two concentric circles” for use on similar goods/services.
Counsel for Mascotte has since filed almost three dozen applications for the DONDA DOVES, DONDA SPORTS, DOVE SPORTS, and GROTESQUE word marks for use on goods/services that range from jewelry and cosmetics to athletic gear and printed materials further adding fuel to reports of West’s plans to begin opening Yeezy retail stores of his own, which Gravante confirmed on Thursday.
UPDATED (SEPT. 15, 2022): Gap has confirmed the end of the parties’ partnership, with Gap president and CEO Mark Breitbard, writing in a message to employees, “While we share a vision of bringing high-quality, trend-forward, utilitarian design to all people through unique omni experiences with Yeezy Gap, how we work together to deliver this vision is not aligned, and we are deciding to wind down the partnership.”