GAP Inc. is a large American retailer of clothes - t-shirts, hoodies, jeans, and more. Its logo is instantly recognizable and in some developing markets, it is extremely popular. In developed markets, it is not doing that well, as it faces stiff competition from fast-fashion such as Zara and H&M. GAP is present in most countries across the globe and the parent company also owns Banana Republic and Old Navy brands. Banana Republic is expensive GAP and Old Navy, cheaper GAP.
In the 10 years, the stock has returned nearly nothing, excluding dividends. I used to cover the company a long time ago and it was a no-go - whether I wanted to buy the company's equity or lend to it. It is clearly past its best and is just surviving in an extremely tough and competitive environment.
Well, the company has now decided to monetize the NFT craze. On 13 Jan 2022, the company launched an NFT collection that is priced between $10 and $500 and will be accompanied by actual physical hoodies.
The company is collaborating with Brandon Sines, the artist behind the Frank Ape cartoon, on the NFT collection that is being hosted on the Tezos blockchain.
If Nike's success is anything to go by, then surely GAP is an iconic brand and its NFTs may help generate sales. The stock went up 5% thanks to this news.
In the past, I have mentioned that I do not like the fact that such companies are selling NFTs but maybe there is a good side to it. If buyers of such NFTs are those that are aware of cryptocurrencies and are comfortable with wallets, then this won't help the industry to a large extent. Sure, NFTs get a lot of advertisement. However, if such NFTs can bring new users to the crypto space, educate them about the market in general and remove their hesitation to use wallets, then this is surely positive. Time will tell. If this helps the crypto world get more adoption, then more companies should get on board.