The fashion retailer, GAP has warned that it may not have enough of a cash flow to sufficiently fund its operations as stores remain shut because of the global pandemic, which is currently taking the world by storm.
The apparel retailer stated that it must take further actions to find liquidity over the next 12 months, such additional job cuts and new debt financing and that other measures could include reducing receipts and orders for merchandise.
“If we are unable to renegotiate the leases and continue to suspend rent payments, the landlords under a majority of the leases for our stores in the United States could allege that we are in default under the leases and attempt to terminate our lease and accelerate our future rents due,” – GAP
“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.”
