Mall owner sues Gap for rent on coronavirus-shuttered stores
The clothing retailer owes three months of rent, totaling $65.9 million
Gap is being sued for refusing to pay rent for stores temporarily closed during the coronavirus pandemic.
Mall owner Simon Property Group said in a lawsuit filed this week that the clothing retailer owes three months of rent, totaling $65.9 million. Gap Inc. has more than 390 stores at Indianapolis-based Simon's malls, including its namesake brand, Old Navy and Banana Republic.
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Gap and other major retailers, including sneaker seller Foot Locker, have said they wouldn't pay rent for stores that were forced to close due to the pandemic. In April, Gap warned that it may be sued by its landlords and that a dispute could be costly and have “an uncertain outcome.”
San Francisco-based Gap did not respond to a request for comment Thursday.
GAP LOSSES NEAR $1B IN CORONAVIRUS FREE FALL
Gap, like other clothing stores, is hurting after temporarily closing its doors in March as the virus spread. The company said Thursday that its first-quarter revenue fell 43% to $2.1 billion. And it reported a quarterly loss of $932 million, or $2.51 per share. The average estimate of nine analysts surveyed by Zacks Investment Research was for a loss of 65 cents per share.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GPS | GAP INC. | 20.76 | -0.27 | -1.28% |
Shoppers wanted casual clothing while they were stuck at home, helping boost online sales for Old Navy and its Athleta active wear brand. Online sales fell for Gap and Banana Republic, which sells suits and cardigans.
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About 1,500 stores, or just over half of its North American locations, have reopened. It expects most of its North American stores to be open sometime in June.
Gap's shares fell 7% in after-hours trading Thursday following the release of the earnings report.