The all-American clothing retailer is joining the likes of Nike, Mattel and Adidas with an NFT series.
First came the Kanye West partnership, then luxury brand Balenciaga and now The Gap (GAP) is wading into the world of crypto with NFTs of hoodies.
On Thursday, the San Francisco-based retailer known for its all-American style of clothes dropped a collection of nonfungible tokens (NFTs) on the Tezos blockchain. Ranging in price from $8.30 to $415, the NFTs depict different version of Gap’s classic hooded sweater and in some cases come with a physical sweatshirt as well.
What Is An NFT?
Brandon Simes, the artist who created New York’s famous Frank Ape series, is the one who designed the series — specific NFTs will come in categories like “rare” and “epic” and be available until they sell out.
Skyrocketing in popularity among both art lovers and investors, NFTs are a way of asserting ownership over a piece of online content like an image or a recording — Nike (NKE) – Get NIKE, Inc. Class B Report, Adidas (ADDDF) and Mattel (MAT) – Get Mattel, Inc. Report have all recently started dabbling in this space both with products and advertising.
Last month, Nike bought a design company that designs virtual shoes for the metaverse — a combination of virtual and augmented reality that is expected to take over as the next version of the internet.
“We are excited about the possibilities that a more planet-friendly blockchain technology can unlock for us and all the new ways it will enable us to connect with our customers,” John Strain, Gap’s chief digital and technology officer, said in a statement.
Why Now?
Last summer, The Gap launched a partnership with YEEZY Apparel, the clothes brand started by the popular rapper who now goes by Ye. This week, Ye and The Gap signed a contract to expand the partnership to luxury French retailer Balenciaga.
But despite the line’s wild success (Yeezy items sell out within hours and sometimes minutes of being launched), the Gap has had a challenging few years — in the quarter ending on Oct. 30, the company swings to a loss of $152 million from a gain of $95 million a year earlier, due to what Gap said were pandemic-related inventory delays and supply chain disruptions.
After closing 217 stores by October of last year, the company also announced plans to reduce the number of Gap and Banana Republic stores by a further 350 units through 2023. That quarter’s results also included $4.16 billion in lease obligations and $1.5 billion in long-term debt — some analysts have gone so far as to suggest that it could eventually file for bankruptcy.
The efforts to launch into digital space is, likely, an attempt to keep up with current trends and stay relevant in a changing landscape — Gap (GAP) stock is down nearly 17% year-over-year but, with the new partnerships and announcements, has been rising steadily in the last month.
“While we entered the third quarter with growing momentum, acute supply chain headwinds affected our ability to fully meet strong customer demand,” CEO Sonia Synga said in the earnings call. “Still, we made an intentional investment in building enduring customer loyalty with accelerated use of air freight to serve them this holiday, choosing long-term growth opportunity over near-term impact to profitability.”
