By Deborah Mary Sophia and Uday Sampath Kumar
(Reuters) -Kanye West's lawyers on Thursday sent a letter to Gap Inc (NYSE:GPS) notifying the apparel chain that the rapper and fashion designer was terminating his partnership with the company, saying it failed to meet its obligations under the contract.
Gap breached its agreement with West by not selling the Yeezy Gap-branded products at its brick-and-mortar outlets and failing to open dedicated stores for the brand, the letter, viewed by Reuters, said.
The company can sell existing Yeezy Gap stocks until the sell-off period, the letter said. Shares in the Banana Republic parent closed 3.6% lower on Thursday.
Gap declined to comment on the matter.
West, known as Ye, in 2020 signed a 10-year deal with Gap to create a line of clothing under the Yeezy Gap brand. The first product from the line - a blue puffer jacket - sold out within hours of launch in June 2021.
"Gap left (Kanye) no choice but to terminate their agreement ... Ye will now promptly move forward to make up for lost time by opening Yeezy retail stores," West's lawyer Nicholas Gravante Jr. said.
However, Gap Brand President and Chief Executive Mark Breitbard said in an internal memo seen by Reuters that the company would wind down the partnership with Kanye as the parties were not aligned on how to work together to deliver their vision.
Ties between West and Gap have been increasingly strained recently. Earlier this month, West threatened to walk away from the brand. (https://on.wsj.com/3eUovP9)
"Kanye's decision...will come as a blow to the brand, which had pinned its hopes on Kanye's magic to help revitalize interest in its ailing business," said Neil Saunders, managing director of GlobalData.
Gap has been struggling to protect margins and pull in sales, blaming inflation and outdated styles at its Old Navy brand.