Gap Inc (NYSE:GPS)'s recent denim collaboration with Hailey Bieber reinforces the retailer's efforts to restore brand authority and cultural relevance, according to Jefferies analysts, who cited strong sell-through and social media engagement as encouraging signs ahead for the company's denim business and broader brand repositioning.
The firm said the limited-edition collection, launched on July 16, featured six washes across two relaxed-fit denim silhouettes inspired by vintage Gap styles and Bieber's personal aesthetic. The capsule was available online, in select North American stores, and in international markets including the UK, China, and Japan, before receiving a limited restock on July 18.
Jefferies conducted a channel check at Gap's Times Square store on the day of the launch and found inventory was already running low by mid-afternoon.
"When we spoke with the sales associate at 3:30 p.m., she informed us that they were low on sizes, and what was on the floor was all that was left," Jefferies wrote. "What was clear was that customers came in to purchase the jeans, with some coming in only to shop the Hailey Jeans."
The brokerage added that despite the July 18 restock, the collection had sold out again across all sizes and colors.
Jefferies believes that the collaboration's financial contribution is likely to be limited but viewed its performance as an encouraging sign for Gap's broader turnaround strategy.
"We view the success of the collab as another encouraging data point in GAP's ongoing effort to restore brand authority and cultural relevance," the analysts wrote. "While the financial impact is limited, we believe the collab reinforces positive momentum within GAP's denim business and broader brand repositioning efforts."
The brokerage also highlighted strong engagement across social media platforms. As of July 20, a TikTok video posted by Bieber promoting the collection had attracted 7.2 million views and 945,000 likes, while her Instagram post performed in line with other major brand partnerships this year.
Jefferies said the combination of strong sell-through and online engagement supports management's strategy of using celebrity collaborations to enhance fashion relevance, denim authority, and cultural engagement.
Shares of Gap are down about 23% so far this year, trading hands at about $20 on Tuesday afternoon.