// Gap plunges to a loss of $932m (£740m) in the three months ending May as the coronavirus pandemic bites
// This compares to a profit of $227m during the same quarterly period last year
// Gap is also being taken to court by the US’s largest shopping centre operator over £52m worth of unpaid rent
Gap has plunged to a loss of almost $1 billion as store closures from the coronavirus pandemic bites into its finances.
In the first quarter ending May, the fashion retailer was $932 million (£740 million) in the red, compared with a profit of $227 million in the same quarter last year.
Meanwhile, net sales in the company plummeted 43 per cent year-on-year.
The results come after Gap wrote off the value of the goods it holds by more than a quarter of a billion dollars.
They were also attributed to lost sales as a result of lockdowns in most of its markets amidst the Covid-19 pandemic.
Gap chief executive Sonia Syngal said the results continued to reflect “material declines in May as a result of closures” but highlighted that online demand was improving.
“While net sales and stores sales continued to reflect material declines in May as a result of closures, we saw over 100 per cent growth in online sales during the month,” she said.
“This online momentum, enabled by new omni-capabilities that have expanded the way customers can shop with us, leaves us well-positioned to fuel our brands going forward.”
She added: “Today we have more than 1500 stores open in North America, ahead of plan, and as stay-at-home restrictions ease in many markets, we expect to have the vast majority of our North American stores re-opened in June.”
Gap, which also operates Old Navy and Banana Republic, suspended rent payments for closed stores in early April and confirmed it was currently in “active discussions” with landlords.
However, Simon Property Group – the US’s largest shopping centre operator – filed a lawsuit this week over Gap owing three months of rent, totalling $65.9 million (£52 million).
Gap has more than 390 stores across the property firm’s estate of shopping centres.