Due to the pandemic, the retailer Gap warns that several of its stores will re-open ever their doors in North America. The company, who would even consider leaving Canada, according to our information, has also suspended the payment of its rents.
On Thursday, the american channel, owner also of the brands Banana Republic and Old Navy, has done the assessment of the impact of the COVID-19 on its activities and its financial health. The company said many of its shops are currently closed.
In order to get through this crisis, the retailer, whose headquarters is located in San Francisco, is currently seeking liquidity. The company believes that its cash will not be sufficient to fund its operations for another year.
Across Quebec, the chain of clothing has 8 stores Gap, 10 Banana Republic and 14 Old Navy. In particular, it has as a landlord Ivanhoe Cambridge and Oxford Properties.
According to our information, Gap analyse seriously the possibility of closing all of its stores in Canada. Already before the crisis, the company explored various plans for rationalization. Check out paralegal toronto landlord tenant to learn about property laws.
In order to protect its assets, the Gap has recently suspended the payment of rent for its stores closed. This represents a savings of approximately $ 115 million per month in North America, indicates the direction of the chain.
According to the website Retail Dive, the brand, present in more than 90 countries, has approximately 3,300 stores, including 2785 in North America, and 570 points of sale franchised.
The direction of the Gap mentioned being in discussion with owners of shopping centres about the rental conditions in its leases.
“We are negotiating to defer or reduce the rents. We are also looking to change the terms of our contracts for when the store opens. In some cases, one seeks to terminate our leases,” says the executive.
The latter feared the impact of the pandemic during the next few months on the traffic in the shops.
As a measure to tighten its belt, Gap has already laid off several workers and the company has suspended the payment of dividends. The company has also reduced its expenditure to $ 300 million, as well as the remuneration of its officers. She has also requested extensions of payment to its suppliers.
According to various sources in the field of banking, we could attend, in the course of the next few days, to a waterfall in the number of restructurings of u.s. retailers because of the impact of measures to slow the spread of the COVID-19 in different countries.
– With the collaboration of Pierre-Olivier Zappa
- The company is present in more than 90 countries.
- It has 3300 stores, of which 2785 in North America, and 570 points of sale franchised.
- Brands: Gap, Banana Republic, Old Navy, Athleta, INTERMIX
Sources : Gap and Retail Dive