Kanye West's Yeezy terminates deal with Gap: 'A king can't live in someone else's castle'

Kanye West, who goes by Ye, said Thursday he's terminated the declaration betwixt his institution Yeezy and Gap Inc.

The determination comes aft Gap failed to conscionable its obligations successful the companies' agreement, including distributing Yeezy products successful its stores by the 2nd fractional of 2021 and creating dedicated Yeezy Gap stores, according to a missive shared by his lawyer with CNBC.

Shares of the retailer fell astir 4% Thursday.

"Yeezy notified Gap of its concerns successful August and gave the institution a contractually-designated 30 days to cure its breaches," Nicholas Gravante, a lawyer for Ye, told CNBC. He said Gap took nary enactment connected the concerns.

"It was ever a imagination of excavation to beryllium astatine the Gap and to bring the champion merchandise possible," Ye told CNBC's "Closing Bell" connected Thursday. "Obviously there's ever struggles and back-and-forth erstwhile you're trying to physique thing caller and integrate teams."

Ye said helium wasn't capable to acceptable the prices helium wanted connected his products and that helium didn't o.k. of colour selections.

"It was precise frustrating. It was precise disheartening, due to the fact that I conscionable enactment everything I had. I enactment each of my apical relationships," Ye said. "Our agenda, it wasn't aligned."

He besides said helium was dissatisfied with advancement connected launching carnal Yeezy stores successful concern with the retailer.

"Everyone knows that I'm the leader, I'm the king," Ye added. "A king can't unrecorded successful idiosyncratic else's castle. A king has to marque his ain castle."

Gravante said Gap's noncompliance with the statement has been costly and that "Ye volition present promptly determination guardant to marque up for mislaid clip by opening Yeezy retail stores."

Gap CEO Mark Breitbard confirmed successful a memo to employees Thursday that the retailer would "wind down" its concern with Yeezy.

"While we stock a imaginativeness of bringing high-quality, trend-forward, utilitarian plan to each radical done unsocial omni experiences with Yeezy Gap, however we enactment unneurotic to present this imaginativeness is not aligned," Breitbard said successful the memo, a transcript of which was seen by CNBC.

The retailer inactive plans to enactment done its Yeezy merchandise pipeline, Breitbard said.

"Important to cognize is that passim this partnership, we person upheld our commitments – and the teams person done truthful with the utmost integrity, navigating obstacles and demonstrating unthinkable resolve," helium said.

Announced successful June 2020, the concern betwixt Gap and Yeezy was acceptable to proceed done 2026. Yeezy, owned solely by Ye, would person royalties and equity based connected the sales. Gap besides agreed to administer 8.5 cardinal shares to Yeezy arsenic definite income targets were met.

The archetypal merchandise successful the Yeezy Gap line, a bluish puffer jacket, sold retired successful hours upon its merchandise online successful June 2021. Gap aboriginal made headlines selling Yeezy products successful its Times Square store, but the termination missive said those products were the effect of a abstracted declaration betwixt Yeezy, Gap and Balenciaga.

Following its launch, Wells Fargo predicted that the concern could bring successful $1 cardinal successful income successful its archetypal year. But Gap has been struggling with slumping income and successful August slashed its fiscal outlook. The institution has acknowledged missteps with its Old Navy chain, and has been looking for a caller leader since its CEO near successful July.

In caller weeks, Ye has publically aired his grievances with concern partners. The rapper, shaper and decorator made his squabbles with Adidas well-known successful a slew of Instagram posts attacking the company's board, and successful an interview with Bloomberg said it was "time for maine to spell it alone."

"I made the companies money. The companies made maine money. We created ideas that volition alteration apparel forever. Like the circular jacket, the foam runner, the slides that person changed the footwear industry. Now it's clip for Ye to marque the caller industry. No much companies lasting successful betwixt maine and the audience," helium told Bloomberg.

As a teenager, Ye worked successful a Gap store and referred to his clip determination successful the lyrics of "Spaceship," connected his 2004 College Dropout album. West and Gap had reportedly been successful interaction astir a imaginable woody since 2015.

— CNBC's Sara Salinas contributed to this report.