Gap warned on Thursday it may not survive the next 12 months intact and would need to borrow more funds in the face of widespread coronavirus shutdowns that have crippled the business of clothing retailers globally.
Yahaira Jacquez reports.
Gap warns of cash shortage, suspends rent payments
With its stores shuttered, Gap on Thursday issued a dire warning: It may not have enough cash to survive the next 12 months.
As a result, the once ubiquitous retailer said it would need to borrow more money by tapping the debt market, slashing jobs and cutting back on orders from vendors.
Sweeping lockdowns have delivered a shock to the already battered retail industry as chains face an unprecedented sales downturn.
Neiman Marcus is preparing to seek bankruptcy protection as soon as this week.
Now, other retailers like Gap are battling to avoid the same fate.
The company - which owns Banana Republic and Old Navy - said it had stopped paying rent for its shuttered stores, which in North America would've amounted to about $115 million per month.
It's now in talks with landlords to defer payments or in some cases terminate leases and permanently close some stores.