Simon Property Group sues Gap for not paying the rent
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 has more than 390 stores at Indianapolis-based Simon's malls, including its namesake brand, Old Navy and Banana Republic.
Simon, the nation's largest mall operator, temporarily shuttered all its properties in March after retail anchors at the locations such as Gap, Macy's and Nodstrom's closed their doors. Simon began reopening malls last month as states started easing restrictions on businesses in an effort to kickstart economic growth.
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.
The mall closure have dented Simon's financial results, with the company's shares down more than 50% this year. Like many brick-and-mortar retailers, Gap was struggling long before COVID-19 crippled the U.S. economy. The company, which is scheduled to report its first-quarter earnings after stock markets close on Thursday, has seen its stock price dive more than 30% this year.
Other big retail chains have struggled during the virus oubreak. J.C. Penney and Neiman Marcus, two other major mall tenants, both declared bankruptcy in May. Clothing seller J. Crew also filed for Chapter 11 last month.
