During the global health crisis, many retailers were deemed nonessential and told to close stores. Gap was just one of many that saw stores across the globe close, but recently the company announced that some of its stores won’t reopen once things get back to normal.
Gap has stores in 90 countries, with a total of 2,785 in North America.
In a filing with the Securities and Exchange commission, Gap disclosed that in April, it had stopped paying rent at North American locations. While the company is currently in negotiation with landlords on lease terms, some stores will permanently close if negotiations aren’t successful.
For Gap, store closings started happening long before the COVID-19 crisis. The company has been shuttering stores over the past couple of years. In 2018 the company announced the closure hundreds of stores across the globe, and in 2019 Gap announced plans to close 230 stores in Canada and the U.S.
Right now, it’s not confirmed how many Gap stores will shutter after the COVID-19 pandemic.
As mentioned, the company is currently in negotiations. However, Gap has already started planning for the future. In response to COVID-19, the retailer suspended stock repurchases, reduced 2020 capital expenditures by about $300 million, and cut exectutive pay. But the company said it’s still considering doing more, including taking on new debt, and furthering spending and workforce cuts, to name a few options.
Gap isn’t the only retailer struggling either.
Footwear News noted many stores North Americans could see close, including the American department store Neiman Marcus.
With consumers being more cautious about their spending, many retailers are anticipating a big change in how people shop. The future of retail post-pandemic is mostly unknown, but it’s likely we will see more than one retailer keep their doors closed.
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