Gap Inc. has stopped paying rent and will likely need to find more money within the next 12 months to stay operational by rachsandl
San Francisco-based apparel retailer Gap Inc. is running out of money, isn’t paying rent and warned it likely needs to find more cash within the next 12 months in order to fund operations—joining other large apparel retailers experiencing dire financial uncertainty as stores across the country remain closed.... [+]Thursday it stopped paying rent for its 2,785 North American retail stores in April, an expense that totals $155 million.
The company temporarily shut down all of its brick-and-mortar stores in response to the pandemic and already furloughed 80,000 retail employees and cut executive pay.The company is also burning through its cash reserves: At the beginning of February, Gap had $1.7 billion on hand and on May 1, it only expects to have between $750-$850 million.
In the filing, Gap warned that if it doesn’t find more money within the next 12 months, it won’t be able to fund its operations; steps the company expects to take include taking on new debt, laying off employees and reducing orders for merchandise.
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