Pop culture sensation Ye, formerly known as Kanye West, has leaned into fashion. Earlier this year, he launched his Yeezy Gap line with Gap (NYSE:GPS), causing shares to shoot up. Today brought another exciting development on that front, as investors learned that Gap and Ye are joining forces with Balenciaga. The new collection promises to disrupt the world of modern fashion even more.
GPS stock is falling today, but that doesn’t mean investors should be worried.
What’s Happening with GPS Stock
As can be expected for a company in the retail fashion sector, Gap saw shares rise in December amid the holiday shopping rush. Gains for the month are currently at 4.55% and just shy of 2% for the week. Today’s performance hasn’t been so positive, though. GPS stock is down more than 2% for the day despite the buzz surrounding the company as news circulates of the new partnership between Ye and iconic designer Demna Gvasalia.
It’s also worth noting that some experts have identified GPS stock as a potential growth stock for the year ahead. InvestorPlace contributor Thomas Niel touted its potential few months ago, speculating that it could impress investors in the quarters ahead.
As we’re about to see, the company’s new partnership will likely allow it to do exactly that.
Why It Matters
The implications for financial markets don’t stop with GPS stock gains, though. Balenciaga recently made headlines when it announced plans to establish a business unit in the metaverse, following the example of others like Ralph Lauren (NYSE:RL) and Gucci. This partnership could be what pushes Gap into the world of digital fashion.
If there’s one thing we know for sure, it’s that the metaverse is going to be the place to be in 2022. InvestorPlace analyst Luke Lango predicted that metaverse stocks would be a top investment opportunity in the year ahead. Specifically, he said metaverse investments would recreate the frenzy we saw with EV stocks.
The concept of digital clothing may seem strange, but some of the world’s most prominent fashion houses are also producing clothing that no human can wear and selling these digital items for impressive profits. This is made possible by non-fungible tokens (NFTs).
All this leads to a fascinating question — are we on the verge of seeing Gap break into the metaverse and take casual fashion with it?
What It Means for Gap
As of now, there’s no clear answer to the question posed above. What we do know is that seldom is the power of influential public figures more clearly demonstrated than in the world of fashion. And in that world, Ye is one of the most influential names.
He certainly has the power to propel Gap to new heights and send GPS stock soaring alone with it. If the company does indeed enter the metaverse, the way Gap is viewed by consumers may be fundamentally changed in a way that will certainly be for the better of investors.
This story is still unfolding, but any investors concerned with the fashion sector should absolutely be paying attention.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
