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Gap Inc. is being sued for refusing to pay rent for stores temporarily closed during the coronavirus pandemic.
Indianapolis-based shopping 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 Simon’s malls, including its namesake brand, Old Navy and Banana Republic.
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 might 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, 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.
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.
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.
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Well, certainly the lawyers will come out of the pandemic with a lot more business.
The pay rent to be in a mall that is OPEN. No way should they be expected to pay full rent in a closed mall. Maybe reduced, but not full by any means.
You might feel differently Jay if you were the owner. The landlord has bills also
Hence my comment about “maybe reduced”… I’d like to think the landlord (Simon) would work with companies during these difficulties instead of working against them.
I haven’t had anyone ask me to renegotiate leases– but I’m anticipating the possibility , and I can assure that it’s a nail biter-/ my overhead has not been reduced , property taxes will go up to pay for pandemic spending — real estate is NOT fluid with liquidity . Rents are carefully negotiated to be fair and still make a living . Real property owners seem to be on everyone’s hit list- taxes for raids schools infrastructure assessments and on and on. Problem with not paying your landlord is… spending other people’s money can only be done until it’s gone. Then what ?