Kanye West's lawyers have told Gap the rapper is terminating his partnership with them, saying it failed to meet its obligations under the contract.
Gap breached its agreement by not selling the Yeezy Gap-branded products at its outlets and failing to open dedicated stores for the brand, according to the legal letter, seen by reporters.
The company can still stock existing Yeezy Gap products until the sell-off period, the letter said. Shares in the company closed 3.6 per cent lower on Thursday, the day the letter was sent.
Gap declined to comment.
In 2020, West, known for hits such as All Falls Down and Famous, signed a 10-year deal with Gap to create a line of clothing under the Yeezy Gap brand. The first product from the line — a blue puffer jacket — sold out within hours of launch in June last year.
West's lawyer Nicholas Gravante Jr said Gap left West "no choice" but to terminate the agreement. He added: "Ye will now promptly move forward to make up for lost time by opening Yeezy retail stores."
However, Gap president and chief executive Mark Breitbard said in an internal memo seen by reporters that the company would wind down the partnership with West as the parties were not aligned on how to work together to deliver their vision.
Ties between West and Gap have been increasingly strained. Earlier this month, West threatened to walk away from the brand.
"Kanye's decision ... will come as a blow to the brand, which had pinned its hopes on Kanye's magic to help revitalise interest in its ailing business," said Neil Saunders, managing director of GlobalData.
Gap has been struggling to protect margins and pull in sales, blaming inflation and outdated styles at its Old Navy brand.