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It's September 2022 on Wall Street. Live from the trading room floor of the New York Stock Exchange, CNBC welcomes a very different kind of guest, Kanye west, or Ye, as he now goes by. He joins by satellite, and what follows is one of the strangest outbursts CNBC has ever aired. Ye appears on screen inside what looks like a shipping container. Bare metal walls, no windows. He's wearing a bulky white sweatshirt and a ragged gray baseball hat. He stares at the ground, rarely glancing at the camera. Not that it matters. His eyes are hidden behind a pair of oversized mirrored wraparound sunglasses. Ye designed the shades himself and planned to sell them in Gap stores. That's Gap Incorporated, the San Francisco retailer famous for laid back basics. Gap was a mall staple during the 1970s, 80s and 90s before stumbling in the 2000s. By 2020, the company was in trouble. Gap's sales were sinking. Things got so bad, the company even considered spinning off its Old Navy brand to splitting into two companies just to stay afloat. Then a new CEO arrived and brought Ye aboard to help her right the ship. Gap signed a deal with Ye to launch a new brand, Yeezy Gap. For Gap, it wasn't just a partnership, it was a lifeline. But now Ye is torpedoing his Gap deal. Just two years into it, Ye tells CNBC viewers that Yeezy Gap's prices are too high. He accuses the company of copying some of his designs in their other merchandise. And he says Gap's leadership has ignored his concerns. Sometimes I would talk to the guys, the heads up, the leaders, and it would just be like I was on mute or something. And they totally our agenda, it wasn't aligned. For months, there have been hints that Ye and Gap weren't seeing eye to eye. Products were slow to roll out, and Ye publicly criticized the company's board. But how did things get this bad? Ye says it's because he hasn't been given the creative control he was promised. And everyone knows that. You know, I'm the leader, I'm the king, right? So a king can't live in someone else's castle. A king has to make his own castle. Ye announces he's terminating his deal with Gap, calling this moment the day of liberation. The interview spirals from there. Ye talks about the homes of billionaire friends, his personal politics, the chance he might move his money from one bank to another. Finally, he gets back on topic. He says there's only one person who can help the Gap brand regain its cool. Ye himself. But renegotiating his deal with Gap is not an option. The king has spoken. Well, don't bring a leader in and have them that lead. You know, why would I argue with people who are getting paid by the Gap? I'm sorry, you know, I'm not going to argue with people that are broker than me about money. For Gap, this isn't just another bad day. It's a public breakup broadcast in real time to Wall street and the world. Now let's pause for just a moment here. Anyone else remember when all this went down in real time? When brands bring in celebrities, it's usually for borrowed cool and instant injection of cultural relevance. But here's the problem. Celebrity timelines and agendas often run on emotion, not earnings calls. If the brand wants consistency and the star wants freedom, things can unravel fast. Partnerships work best when both sides want the same future and agree on who's in charge. Otherwise, you're not hiring a savior, you're renting drama. And in the case of Gap, you get a hard and very public lesson in where you really stand in the hierarchy of pop culture. Ouch. In Ye's mirrored sunglasses, Gap is forced to see itself a fading legacy retailer losing cultural relevance while being both outpriced and outpaced by cheaper, fast fashion rivals. Now Gap faces a choice. Should it attempt to revive the quality and style that once made it iconic? Or should it leave its old khakis in the closet and try on something brand new? When planning for your future, you want someone with a history of keeping their word year after year. For nearly 160 years, Pacific Life has been a trusted name in the industry. But that isn't just a number. It's experience that matters. It's 160 years of promises held, helping generations retire with confidence, protect their loved ones, and plan for whatever comes next. Whether you're looking for life insurance, employee benefits, or retirement income solutions, when your future is on the line, you want history on your side. And believe me, Pacific Life has been there, always there, through changing times, always focused on your needs, ready to secure your tomorrow. Ask a financial professional how Pacific Life can help you feel prepared for what's next. Pacific Life Insurance Company, Omaha, Nebraska. And in New York, Pacific Life and Annuity, Phoenix, Arizona. Because with Pacific Life, you're not just planning for the future. You're partnering with trusted experience as business owners and managers. You use software for your business every day. You. You use one piece of software to manage your customers, another to manage your employees, another to manage your finances. And the list goes on. You buy these pieces independently and hope they fit neatly together like a puzzle. And then you find out the hard way that they don't and you end up with a mess at the heart of your business operations. Does any of this sound familiar? Well, fortunately, Zoho offers a solution to this chaos. It's called Zoho One. Zoho One is a suite of around 50 pre integrated business applications that fit together beautifully. So instead of dealing with disparate software from multiple vendors with multiple contracts and price points, you deal with one vendor with all the pieces of the business software puzzle neatly put together, offered at a very attractive price. Now, if this sounds interesting to you, you gotta check out Zoho1. At Zoho1, that's Z O H o. With Zoho, you're not just licensing apps, you're licensing Peace of Mind from Wondery. I'm David Brown and this is Business Wars. Be honest. When was the last time you fell into the Gap? For a lot of us, it's been a while. Gaps logo, sweatshirts, khakis and denim once defined casual American style. The Gap ruled them all. And it conquered Wall street, too. But these days, the Gap just doesn't dominate our closets the way it used to. Increased competition has something to do with this. Starting in the new millennium, fast fashion brands like Zara and HM figured out how to undercut Gap on price, style and speed. As they did, Gap became weighed down by all its brick and mortar. It went from an iconic brand to one that was symbolic of America's retail decline. Remember when Gap was cool? When celebrities like Spike Lee and Madonna graced their print ads? Or when khaki clad kids jump jived and wailed in TV spots? Well, the Gap has been chasing that magic ever since. And failing. Despite some success with price competitive Old Navy, the Gap brand went stagnant throughout the 2010s and into the 2020s. By 2025, the company wasn't making much more than it did back in 2010. Gap has tried to fix this, including hatching a plan to spin off Old Navy, its most successful division. That didn't work. Nor did the plans of a succession of CEOs. Five different leaders since 2000. But now Gap has a new boss and a new plan and the confidence that this time it'll get its groove back. In our new series, we'll tell the story of how an American icon fell out of fashion and of the stylish new leaders who think they can raise it back up. The big question Can Gap Inc. Truly reinvent itself as a culturally relevant and profitable fashion house, one that unites distinct American brands under one umbrella? Or will it fall back into the Gap, riding its own nostalgia all the way into irrelevance? This is episode one faded khakis it's August 2016 in Fishkill, New York. Once a defining brand of American fashion, the Gap has been limping along for most of the 2000s. Its stock is slumping, its stores are underperforming, and its clothes aren't exactly flying off the racks. So when a fire erupts just after 10pm Inside a massive Gap distribution center 60 miles north of Manhattan, it's not just a setback, it's a massive disaster. Workers at the 24 hour facility rush outside as flames flicker on the building's roof and smoke billows. Firefighters quickly arrive. They scramble up ladders and spray water onto the roof, but it's of little use. The blaze only grows larger as flames feed on tens of thousands of cardboard boxes and garments at home. The facility's manager, a 30 year Gap veteran, gets the call he's long dreaded. An employee breathlessly tells him that a fire is consuming the distribution center. The fire rages for more than six hours. Just before dawn, it's mostly extinguished, and by then the extent of the damage is clear. A news reporter goes live from the scene. Flames rose through the sky, visible for miles overnight. The building burning is the enormous Gap Incorporated campus in Fishkill, which houses a warehouse and distribution center for the clothing company. The nearly 2 1/2 million square foot facility was renovated and expanded in 2014 and has been badly damaged, if not destroyed, overnight. Later that morning, Gap Inc. CEO Art Peck gets a call at the company's San Francisco headquarters. Gap's biggest distribution facility is gone. Peck sets the phone down and puts his head in his hands. He's relieved to hear that no one was hurt. But getting close to the east coast will be a huge challenge. And the timing couldn't be worse. Gap needed this fire about as much as it needed a hole in the head. After dominating the 90s, Gap has been struggling for most of the 2000s. Not only has it lost some of its brand luster, its stock now trades $4 below the price it opened at in Y2K. Peck was tasked with fixing this when he was promoted to CEO in February 2015. But sales haven't improved under his leadership. In fact, they've gotten worse. Just months into his tenure, Peck promised investors that a no excuses spring was coming in 2015. But that spring came and went, and sales at the Gap, Old Navy, Athleta and Banana Republic dropped a combined 6% over already bad numbers from 2015. Inventory piled up into the summer, and these piles have been a big problem for Gap. Unlike fast fashion chains like H and M, Zara and Uniqlo, the Gap has struggled to adapt to changes in customer tastes. The other companies are built for speed and are better equipped at swapping out inventory. Gap can't keep pace. One example. At Gap, all new merchandise orders require approval from headquarters. At Zara, individual store managers can authorize new stock whenever they need it and when stock is ordered. Zara's factories around the world are set up to produce clothes in small quantities. This way, inventory doesn't pile up if items don't sell. Xara even embeds radio frequency identification or RFID chips to help manage their inventory. The chips store information and electronically alert managers about which items are and aren't selling. They also prompt reorders when stock gets low. Gap has experimented with the same technology, but its experiments aren't at the same scale as Xara. You see, Zara moves like a tech company that happens to make clothes. Small runs, constant feedback loops, rapid restocks. It's fast, messy, iterative, and it works. Legacy brands like Gap want tidy seasons and massive volumes. But in a world where TikTok can kill a trend in six days, neatness is a liability. Agility beats precision every time. And Gap doesn't own its own factories either. It outsources clothing production and makes mass orders months in advance. These big orders have led to big problems, to name one. The company ends up stuck with pallets full of women's blazers whose armholes were cut too small for the average woman. Little wonder then, that by October, Gap store sales fall another 10%. But amidst this slide, one stock analyst sees a silver lining. He calls the summer fire a fortuitous reduction in inventory and implies it might help with Gap's unappealing merchandise assortments. Now let that one sink in for a second as well. A devastating fire is good news. Yeah, that's how bad things have gotten at the Gap. In time, Peck will hatch a plan to help Gap rise from the ashes. But after two more years of no excuses, Springs that failed to deliver, he might be the one about to get burned. It's February 2019 in San Francisco. Art Peck, the 64 year old CEO of Gap Inc. Steps into the company's waterfront headquarters outside the Bay Bridge glints in the morning sun. The 15 story headquarters may be made of glass and steel, but it was built on khaki and denim, the clothes that once made Gap a symbol of American casual style. Today, though, that iconic legacy seems lost. Peck makes his way to a conference room. At the door, he braces himself for the call. Ahead, a shareholder update announcing Gap's latest ugly financial numbers. Sales are flat at Old Navy. They're down 5% at Gap stores and across the company. Gross profit has slipped by 3% since Peck took over as CEO. Gap stock has lost around a third of its value. Peck takes a seat, unbuttons his blazer and adjusts the collar of his starched white shirt. He looks more like an accountant than one of the khaki and denim clad kids who danced through Gaps ads back in its heyday. Back then, Gap CEO and creative directors often relied on gut instinct to decide if waistlines should be extra high or slouchy or if tees should be slim or boxy. But months into his job as CEO, the buttoned up Peck fired the creative directors, calling them false messiahs. Instead, Peck put his faith in numbers, not designers. Under his leadership, the chain has been relying on analytics, customer surveys and bits of sales data for decision making. This has turned Gap stores from style setters to style followers. You know, often here on Business wars, it's important to try to get inside the thinking of the decision maker. Let's try that here. Why would Peek approach fashion as he did? Well, data feels safe because it doesn't get embarrassed when a product flops, right? Designers do. But no spreadsheet ever invented the miniskirt of the Air Jordan. The best companies use data to filter out bad ideas, not to generate good ones, much less new ones. It's a bit like trying to win a football game, playing only defense. If you wait for the numbers to bless innovation, you'll always be three steps behind the team that's taking chances. The one bright spot for Gap Inc. Isn't its namesake brand. It's Old Navy. While Gap stores languished under Peck, Old Navy surged its $8 billion in annual sales makes up nearly half of Gap Inc's total revenue. It's Old Navy keeping the company afloat. But now Peck has decided to send it out to sea. Inside the conference room, Peck kicks off the investor call with a surprise announcement. He says Gap Inc. Will be split in two. Old Navy will spin off into its own company, led by their CEO Sonia Singel. Meanwhile, Gap, Banana Republic and fitness brand Athleta will be bundled into a new company called Newco. Newco. Seriously? The placeholder name makes the spin off plan seem like it came out of nowhere. Peck insists that splitting the company in two will allow executive teams to better focus on the strengths of their brands. But when pressed for details on the conference call, Peck doesn't seem to know how this will actually work. As we continue to do the work and learn things, we're going to be as transparent as we possibly can to really show you what these two new companies look like and what the puts and takes are associated with this. But we're confident it's the right thing to do. Absolutely confident. Funny. Doesn't sound all that confident. Maybe that's because Peck's data driven approach is hasn't been the best fit for a company whose brand was once defined by laid back vibes and casual denim. Today, though, the Gap brand is unmoored. Is it a slightly more expensive Old Navy? A slightly less expensive Banana Republic? A somewhat less hip Zara? A somewhat hipper target? Their identity seems lost out there in the fog over the San Francisco Bay. This identity drift is showing up in the numbers, too. Since 2000, Gap Inc. S market value has shrunk by 77% and its annual revenue has been stalled at about $16 billion for years. This stall has forced Peck to cut costs. On the same investor call, Peck announces that the company will close 230 underperforming Gap stores around the country. Wall street is pleased with these changes. The day after Peck announces he's splitting, the company in two, shares soar 16%. But the optimism for Gap's future is short lived. Over the next two financial quarters, net sales and gross profit continue to slide. The stock price follows. By summer of 2019, it has lost a third of its value. That fall, just days before another disastrous earnings report, Peck abruptly leaves the company. Soon after, the Old Navy spinoff plan is shelved. Gap is now on the clearance rack. But as a new CEO comes on board, the question isn't whether Gap can grow again, it's whether the brand can regain its relevance again. Gap needs a savior, and fast, and it's hoping to find one in a man who once literally declared, I am a God. Enter Kanye West. This message is brought to you by Apple Card. So you left your wallet in the car? Or was it at home? No need to panic. With your iPhone you can tap to pay using Apple Card with Apple Pay and earn unlimited daily cash back when you do. Apple Card is ready when you need it, subject to credit approval. Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch terms and more at applecard.com Black Friday is right around the corner. You know what that means, right? It's the perfect time to score huge deals on all things home at Wayfair's Black Friday sale. And starting October 30, you can get up to 70% off during Wayfair's Black Friday sale all November long. 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And by 2020, praying that a pop music God could save would have been hard to imagine this back in 1969 when Donald and Doris Fisher opened the first Gap store in San Francisco. In the afterglow of the Summer of Love. The Fishers sensed that shoppers wanted something beyond the buttoned up styles found in department stores. Their new shop offered Levi's in every size and a name that made a statement. The Gap. A nod to the generation gap of the 1960s, the Fishers were selling more than just clothes. They were selling identity. In the early years, this identity came with a fun jingle. The catchy jingle helped Gap catch on. The company expanded nationwide, went public in 1976, and in 1983 bought a quirky safari themed chain of stores called Banana Republic. By the 1990s, the Gap wasn't just growing, it was shaping culture. The brand shifted from selling Levi's to selling a vibe. One moody 1992 commercial featured British poet Max Blagg reading verses over dreamy images. A motorcycle, a jukebox and Twin Peaks star Miatchen Amik. Lips fit, mouths so kiss them and the face they adorn remind you of someone you once knew. Some Hot night long ago. Familiar as these blue jeans that fit like a glove. In 1992, Gap dropped Levi's in favor of its own brand of jeans. That Same year, a 15 year old named Kanye west took a job in a Gap store in Chicago. And just like in 1969, Gap wasn't just selling clothes. It was selling effortless all American cool. Right. As America was embracing casual Fridays, everyone was dressing in Gap, including celebrities. A 1992 issue of Vogue featured supermodels wearing Gap. Four years later, Academy Award nominee Sharon Stone wore a $26 Gap mock turtleneck on the red carpet. She lost the Oscar, but Gap won the publicity jackpot. On Saturday Night Live, Gap girls David Spade and Adam Sandler could talk customers into buying anything. In one sketch, the girls sell Mike Myers on jeans that are as big as a tent. Those look great. Definitely. Are you sure? They're even bigger than the last pair I bought, and those were pretty huge. Did you cinch them? I tried them with a belt. No, you can't do that. You gotta cinch em. Yeah, we told you to cinch em. Meanwhile, Gap's ads became pop culture events. At the height of the swing dancing revival, a Gap commercial featured khaki clad dancers jumping and jiving. The spot even aired during the Seinfeld finale. By the end of the 90s, it felt like Gap. Like the Gap girls could sell us anything. Their stores were clean and colorful. The brand seemed full of optimism. The business had grown from a $480 million business in 1983 to a 14 billion dollar powerhouse in 2000. So what went wrong? Well, in the ever changing fashion business, nothing stays cool forever, that's for sure. Gap was so successful at selling casual basics that everyone else started selling them too. But Gap's competitors went one step further. Companies like Zara, Uniqlo and H M weren't just selling affordable basics. They were also selling Runway looks at shopping mall prices. Gap sales slipped in 2001 and then again in 2002. Later that year, Mickey Drexler, the CEO who had led the brand since 1983, resigned. By the 2010s, the gap was a punchline. In the film Crazy Stupid Love, Ryan Gosling's sharp dressed ladies man gives Steve Carell's schlubby character Cal a pep talk. Cal, be better than the Galaxy. Be better than the Gap. Say it. I'm better than the Gap. Making things worse, the brand stagnated. At the same time, online shopping was taking off, creating a retail apocalypse. Like many retailers, Gap closed hundreds of stores, shrinking by more than 600 locations. By the time the 2020s arrived, Gap was down to less than a thousand locations. By then, three different CEOs had come and gone. Without Old Navy, which accounted for more than half of all sales at Gap Inc. The Gap might be gone as well. In 2020, the company had put Old Navy veteran Sonia Singal at the helm of Gap Inc. Desperate to get its groove back, the company turns to a former employee for a dose of cool. Kanye West. But Cashing in on Ye's celebrity won't come cheap. It's spring 2020 in the Bahamas. Mickey Drexler, the 75 year old retired CEO of Gap Inc. Picks up the phone inside his 9,500 square foot beachfront compound. On the other end is Kanye West. Kanye is about to close a deal to design a clothing line for Gap. As a former Gap employee, Kanye has long dreamed of reviving the brand. At one point, he even declared he wanted to be the company's creative director and the Steve Jobs of the Gap. Now Kanye wants Drexler's advice on whether he should sign on. Drexler spent almost three decades as Gap's CEO, presiding over its best years. He hasn't worked for the company since 2002. But he knows the apparel business, and he sees trouble ahead. He advises Kanye, don't do it. Kanye is surprised, but keeps listening. Drexler tells him that Gap is a bad cultural fit for him. It's not because Kanye doesn't understand Gap's products or customers, or because Gap won't let Kanye be Kanye. It's simply because Gap Incorporated is a big 16 billion dollar corporation and Kanye is not a corporate person. Kanye takes in the advice, but he can't resist. He desperately wants to create an affordable line of clothing bearing his brand. And so in June 2020, Gap announces the deal in a press release touting that a bold partnership will bring Yeezy apparel to the people. Shortly afterward, Kanye's Yeezy brand puts out a boldly lit Instagram image. What? No high energy press event? No singing? No dancing? No Kardashians? Nope, nope and nope. Just an email and an Instagram post. This is how a billion dollar partnership begins. Despite the muted introduction of the deal, Gap stock shoots up 15%. But Drexler's warning is about to prove prophetic. Days after the deal is announced, Ye announces he's running for president. And at his first campaign rally in July 2020, he threatens to bolt from his Gap deal. I am making the board at Gap and That has to change. Today, Wall street hears Yay. Loud and clear. Gap stock immediately drops nearly 6%. Gap has no comment, and it seems like no one extends Yay. An offer to join the board. He doesn't walk away from the deal. But in time, Gap may come to wish that he did. It's August 2021, the middle of the night in Times Square. Workers rush to reset displays inside Old Navy's flagship store. They shuffle clothing into new sections and rearranged display tables. One by one, brand new mannequins are wheeled into position and dressed in Old Navy's unique mix of denim dresses, cargo pants and tees. But these aren't your typical mannequins. There's not a size 2 in sight. Instead, there are size 12s and 18s. When the doors open the next morning, customers step into the new Old Navy. Here in New York and at 1200 stores in the US and elsewhere, Gap's discount chain has changed how it sells women's clothes. The plus size section? That's gone now. Every item is available in every size from 0 to 28, and the prices are all the same, no matter what the size. This moment is the culmination of years of work. Back in 2017, surveys and focus groups revealed a sobering truth. Plus size shoppers felt embarrassed, even humiliated, by their shopping experience. So Old Navy decided to start over. Instead of designing clothes on a size 8 mannequin and scaling up or down the way most brands have done over years, the brand partnered with a design professor and built a new process. They scanned nearly 400 women of different shapes and sizes to create patterns that truly fit everyone. The company then spent two years retooling factories to cut and sew garments for every body type. And on this summer day, Old Navy is touting these changes with one body quality. A splashy ad campaign starring Saturday Night Live's Aidy Bryant hits TV and TikTok billboards are put up around the country. Old Navy CEO Nancy Green calls it the biggest launch since the brand was founded in 1994. The fashion press declares it a revolution, and on social media, plus Size customers cheer the change. Wow, this is actually so cool to be able to look through the entire section and not just have to beeline it for the back. I feel like an actual wanted customer. There's just one problem. Old Navy and Gap executives are about to discover that while one size may not fit all, making every size doesn't fit the bottom line. Let's say hypothetically, or maybe not so much. I'm developing a new podcast that needs an assistant producer, someone who knows how to brainstorm subjects to talk about, find guests to bring in. That's a tall order. In other words, it's a job for Indeed. Sponsored Jobs Spend more time interviewing candidates who check all your boxes and you know listeners of this show will get a $75 sponsored job credit to help you get your job the premium status it deserves@inn Indeed.com businesswars just go to indeed.com businesswars right now and support our show by saying you heard about Indeed on this podcast. Indeed.combusinesswars terms and conditions App Hiring do it the right way with Indeed, closing the books, getting your people paid, and bringing on new hires, Running a small or mid sized business can be exciting and also a little chaotic. Workday Go makes simplifying your business well, simple. Imagine all the important aspects of your company, hr, finance and payroll, all on the AI platform. No more juggling multiple systems. No more worrying about growing too fast. Just the full power of Workday Go, helping small to mid sized businesses like yours scale and run more smoothly. Think about what that means. Seamless onboarding for new team members, real time insights at your fingertips, and payroll that works perfectly every single time so you can focus on the big picture and go after your big ambitions. And with Workday you can activate quickly in as little as 30 to 60 business days. So simplify your business. Go for growth go with Workday Go. It's November 2021. The first item in the Yeezy Gap list has finally started shipping to customers around the world. The $200 puffer coat called the Yeezy Round Jacket went on sale in the summer as an online exclusive. But because Yeezy products are often launched in limited editions, where most manufacturing is only done after orders pour in, some customers wait five long months for the first jackets to arrive. When the jackets finally do arrive, shoppers tear into their packages and find a shiny, oversized coat that's puffed like a balloon. The coat has no buttons, no zippers, no way to cinch it. Shoppers knew that was what they were getting. But reactions on the fits are split. Some think the inflated design makes them look like Violet Beauregard after she ate the three course meal chewing gum in Willy Wonka. Others love the coach's uniqueness, including this hyped YouTuber. I love this coat. I really do. I like what it has going for it. I appreciate the fact that Kanye west is working with the Gap and making them relevant somewhat. Again, I just think they have a really good thing going for them. And I think this is cool. Cool. That's exactly what Ye was supposed to bring. Coolness and cultural relevance. But he's also brought something friction behind the scenes. Gap's executives and Ye's team are already pointing fingers over delays that have led to just two Yeezy products so far, one jacket and one hoodie. Back in August, Gap tasked an executive to act as a liaison between the two groups. But it's a culture clash. Ye's squad is fluent in the language of high fashion, while, yeah, Gap's team speaks mass retail. It's the exact problem Gap's old CEO Mickey Drexler predicted. Still, by January 2022, Gap is ready to roll out a major restock of one of its two Yeezy items, the Perfect Hoodie. It's a cropped heavyweight pullover available in a rainbow of colors. To promote its arrival, Gap buys ad space during the college football national championship game. The spot is also the video for a song called Heaven and Hell off Ye's newest album, Donda. It's set in a dystopian city where no one shows their faces and everyone wears the perfect hoodie. The hoodie breaks Gap's single day sales record for one item. And it's doing just what the Yay deal was supposed to to do attract new shoppers. Some 70% of the hoodies buyers have never shopped at Gap before, but even Blockbuster Yeezy drops can't stop Gap from continuing to bleed cash. It's April 2022 on Wall Street. Gap shares take a 19% dive soon after the markets open. Traders are ditching the stock because Gap just parted ways with the head of Old Navy and is projecting yet another steep sales decline for the upcoming quarter. At midday, with the stock still struggling, CNBC asks a trading expert for advice on Gap shares. Her answer is blunt. If you own it, get out of it, definitely don't buy it. This is a actually the second time the company has given us lower guidance just this year. And so this is something really concerning. It's also citing promotional levels, which means it's having to put stuff on sale, which is not something that other retailers really have been facing. Markdowns at Gap are nothing new. The company struggled to move its inventory for years. Hey, remember that fire back in 2016? That may have been the fastest way Gap ever cleared product. Gap actually ended the first quarter of 2022 with a third more inventory than it had the year before. And part of this inventory is in extra large and extra small women's clothing. In May, Old Navy pulls back on its pricey body quality line. The multimillion dollar initiative frustrated mid sized shoppers who often found their sizes sold out, while plenty of very large and very small sizes remained in stock. This might be why Old Navy sales have slumped. So Gap Inc. CEO Sonia Singal decides to sell fewer of what it calls extended sizes in stores that'll only be available online. And that is a disastrous misstep. By July, Single is gone. Gap is once again without a leader and without a distinctive brand voice. And its partnership with Yay is about to go straight into the garbage. Literally. It's July 2022 in Times Square, just days after Sonia Singel's resignation. Shoppers are lined up around the block at Gap's flagship store. They're here to buy a new line of Yeezy Gap products that have been produced with the help of the high fashion brand Balenciaga. Until now, Yeezy Gap items drop one at a time. But this, this is a full collection called Yeezy Gap, engineered by Balenciaga. When the doors open, shoppers enter to find a store that looks nothing like the Gap. The familiar stacks of tees and jeans are gone. Most walls are painted black. One wall features a gray and white mural of a dove flying in the clouds. Another has large vertical screens where shoppers can play the Yeezy Gap Balenciaga video game. The radical makeover underscores just how much is riding on this brand deal. Reports say Gap hopes Yeezy Gap will become a billion dollar business, 1/16th of the company's sales. In the center of the store are huge trash bags containing random assortments of Yeezy Gap clothing. Shoppers have to dig through the bags to find what they want. It's chaotic, it's polarizing, and it's pure Yay. Inside the trash bags are hoodies, pocket T shirts, jackets with and without hoods, sweatpants, even long johns with footies. Everything is in a shade of gray or black and looks like something Ye himself would wear. So what do you make of this? There are some who'd call this bold retail. Others would call it dumping clothes in hefty bags. You know, stunts often win Instagram, but they rarely fix a broken or outdated business model. Compare this with what Apple did for retail. Apple stores reinvented shopping by making it fun and frictionless. Gap it thinks it's buying a new look and a new vibe fashion disruption. What it really bought was something more like performance art with a cash register. These clothes don't look anything like the ones that built the Gap's reputation. The Gap has always been about simplicity and selection. T shirts in a rainbow of colors, jeans in every size, khakis for all occasions. Anyone could wear Gap, and for a while everyone did. But these new designs, not so much balloon like jackets, cropped hoodies that bunch at the waist, gray T shirts with a dove on the back. These aren't looks that work for everyone. And yet these looks have generated excitement for shopping at the Gap for perhaps the first time since Seinfeld went off the air more than 25 years ago. The looks also spark controversy. Critics call the black trash bag stunt insensitive to people who are homeless. Ye discusses the backlash with a Fox News reporter, but he refuses to apologize. This is like, not a joke. This is not a game. This is not just some celebrity collaboration. This is my life. You know, I'm fighting for a position to be able to change clothing and bring the best design to the people. By September, though, Ye taps out of that fight. After two years, he has only a handful of products to show for his partnership with a Gap, so he publicly breaks up with the brand on cnbc. Gap keeps selling Yeezy Gap until a few weeks later when Ye makes anti Semitic statements that cause Gap and other brands to drop their Ye collaborations. Ye's split from Gap is such a hot topic it becomes fodder for comedians. Kanye west has now been dropped by Adidas, the Gap, Balenciaga and all bar mitzvah playlists. But at Gap, no one is laughing. The company bet big on a cultural icon and lost. Now it's about to take another gamble, naming a top executive from Mattel as its new CEO. Its cell seems like a surprising choice, but this exec revived another faded fashion icon, and now Gap's future lies in the hands of the man who brought back Barbie from Wondery. This is episode one of Gap's revival for Business Wars. A quick note about the recreations you've been hearing. In most cases, we can't know exactly what was said. Those scenes are dramatizations, but they're based on historical research. If you want to find out more about the Gap, check out the reporting from Amanda Mole and Lily Meyer in BusinessWeek and Suzanne Kapner for the Wall Street Journal. We also recommend Nicole Laporte's story in Fast Company titled One Leg at a Time. I'm your host David Brown. Joseph Guinto wrote this story. Sound design by Josh Morales. Kyle Randall is our lead sound designer. Fact checking by Gabriel Drake. Our Managing producer is Desi Blalock, produced by Tristan Donovan of Yellow Ann. Our senior producers are Ginny Blume and Emily Frost. Karen Lowe is our producer emeritus. Our executive producers are Jenny Lauer Beckman and Marshall Louie for wondering. Okay, Carrie, you ready? Quick, quick, quick. List three gifts you'd never give. A cowboy. Lacy bobby socks, a diamond BR& a gift certificate to Sephora. Oh, my God. That's outrageous. Carrie. Oh, wait, we're recording a commercial right now. We gotta tell them why we're doing this. Oh, yeah, Sorry, pod listeners. Okay, so we're five besties who've been friends for five million years. And we love games, so of course, we made our own. It's called Quick, quick, Quick. You just pick a card and have your partner give three answers to an outrageous question. It's fast, fun, fantastic, and a bunch of other funny adjectives. Anyone can play your mom, your dad, your kids, your kids, your Auntie Edna, and even your butcher. And you know what's incredible? There are no wrong answers. Just open your brain and say, what's in it. Just quickly. And you're not going to believe this. Well, you might once you start playing. It's as much fun to watch as it is to play. Seriously. So get up and go grab your copy now at Target and Amazon. Quick, quick, quick. It's the fastest way to have fun.