Gap Incorporated has stopped paying rent on its stores across North America, according to a Securities and Exchange Commission filing. That expense alone costs Gap $115 million monthly.
"We are facing a period of uncertainty regarding the ongoing impact of the COVID-19 pandemic on both our projected customer demand and supply chain," the company said in its filing.
The move comes a month after the clothing retailer furloughed a majority of its store staff in the U.S. and Canada due to the coronavirus pandemic.
San Francisco State University economics professor Anoshua Chaudhuri said the retail giant’s cost-saving measure could be the harbinger of many more shuttered stores and empty malls — even after shelter-in-place orders are lifted.
"People are going to hold back on their demand for things that they don't really need," Chaudhuri said. "They're going to save as much as possible. If there's no demand from consumers, it's going to hit these stores very heavily."
— Monica Lam (@monicazlam), Shannon Lin