Gap posts $932m loss, shares fall 8pc

Shares in the group fell over 8pc.

Gap (NYSE: GPS) has posted a $932m (£740m) loss in the three months to May.

The clothing retailer reported a 43% fall in sales during the period, as 90% of the group’s stores were closed amid the Coronavirus pandemic.

Although sales were hit hard in the last quarter, online sales are improving. For the month of May, online sales at the retailer had doubled compared to the same month last year.

The retailer has up to 2,800 stores in North America, the vast majority of which are set to open in June.

Whilst many of the stores have been closed, Gap was sued by the Simon Property Group for refusing to pay rent for stores during the pandemic. Gap is said to owe the shopping mall operator a total of $65.9m for three months of rent.

In a statement on Thursday, the retailer said they are trying to reach an agreement with landlords.

“It’s important to note the profound effect that Covid has had on shopping centers as well, leaving them closed to us and our customers for months,” said the group.

“We remain committed to working directly with our landlords on mutually agreeable solutions and fair rent terms. 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.”

Following the company’s results, shares fell more than 8% in after-hours trading.

Shares in the group are currently trading +1.59% at 12.14 (0948GMT).

 

 

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Safiya focuses on business and political stories for UK Investor Magazine. Her interests include international development, travel and politics.