Gap Inc. Lawsuit: Why The Apparel Retailer Is Being Sued
Gap Inc.’s (GPS) woes continue as the apparel retailer has now been sued by one of its landlords. Gap Inc. announced in April that it was in financial straits and was skipping out on paying rent at its stores as they remained closed because of the coronavirus pandemic.
A lawsuit was filed by the company’s landlord for its Times Square store in New York City, Bloomberg reported. The suit claims that Gap Inc. did not pay rent for April and May along with water charges and snow removal expenses, the news outlet said.
The landlord reportedly contends that it has an unpaid bill of $530,334, in addition to at least $20,000 in attorney fees.
Gap Inc. closed all of its stores in March and furloughed the majority of its workers following the closures. The company is in the process of re-opening 800 stores in May as it looks to revive itself amid the COVID-19 crisis.
Previously, Gap Inc. warned of its financial uncertainty saying at the time, “We are currently negotiating with the counterparties under those leases to defer or abate the applicable rent during the store closure period, to modify the terms (including rent) of our leases going forward after the stores reopen, or in certain instances to terminate the leases and permanently close some of the stores.”
Gap Inc. expects to have $750 to $850 million in cash on hand, which it said may not be enough to continue operating over the coming months.
Shares of Gap Inc. stock were up 4.88% as of 1:16 p.m EDT on Thursday.
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