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America's largest mall owner sues Gap for 66m dollars of unpaid rent

By Don-Alvin Adegeest

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Retail

America’s largest mall owner, Simon Property Group, is suing the Gap for 65,9 million dollars of unpaid rent.

Gap, like many retailers, was forced to close its stores during the coronavirus pandemic. The loss of income has yet to spurn many landlords to offer lease relief.

In April Gap said it had stopped paying rent on temporarily closed stores, equating to a monthly cost of 115 million dollars for its shuttered North American retail outlets. The company operates 412 stores in Simon Property Group malls, including Old Navy and Banana Republic, making it the mall owner’s second largest tenant.

Gap did not dismiss the possibility for litigation, stating: “Although we believe that strong legal grounds exist to support our claim that we are not obligated to pay rent for the stores that have been closed … there can be no assurance that such arguments will succeed,” the company said in a filing with the Securities and Exchange Commission at the time.

Simon is asking the court to order Gap to pay up to 66 million dollars, in addition to future rent payments.

“We remain committed to working directly with our landlords on mutually agreeable solutions and fair rent terms, just as our hundreds of industry and government partners have sat with us in good faith to shape the post COVID business landscape,” a Gap spokesperson told CNBC in an emailed statement. “We are pleased with the progress we’ve made with many landlords as we’re reopening stores across the country, moving forward together towards growth.”

Image: Gap store by Nils Krüger

Banana Republic
Coronavirus
Gap
Old Navy
Simon Property Group