“American fashion retailer Gap Inc. claims that it might have to stop the operations for 12 months as it does not have enough money.”
As the pandemic tightens its grip on the fashion retailers around the world, Gap Inc. may lose its chance to survive. The company has been following the suit of furloughing employees and shutting stores. But, suspending the rent worth $15 million in North America is what hitting it hard.
Gap that has already been swimming in deep waters due to lost sales, sees a new hurdle in front. On Thursday, it said that it has been in talks with landlords to cut rents or extend the lease and in extreme cases shut the stores permanently due to the inability to pay. It further stated that in order to survive it will have to go into heavy debt, cut jobs, defer capital expenditures and even cut back orders from vendors,
It also said that it expects to have $750-$850 million of cash and cash equivalents inclusive of short-term investments at the end of the fiscal quarter ending May 2. Shares of the company are already down nearly 3% in early trading.
Gap, one of the famous brands of Gap Inc. was once a rage among Americans. But, it has been witnessing a downfall for a while now and the pandemic is worsening the retailer’s situation.