With retail stores nationwide mapping out recovery plans from the financial impact of COVID-19, mall operator Simon Property Group has filed suit against San Francisco-based Gap Inc., alleging the clothing company has failed to pay $66 million in rent.
“I think in different parts of the state, some lessees and landlords have done some negotiating, about not paying rent now and paying at the end of year, hoping things change and are not shut down again,” Rachel Michelin, president of the California Retailers Association, told the Northern California Record. “But I can understand, if you’re a mall operator, you want your storefronts full.”
Gap is not the only national retailer in dire straits since the shutdown orders closed malls and other shopping venues in mid-March.
“Because we’re in the health pandemic, what I would like to see is more conversation about how we can work together in the whole family of retail, how we can really collaborate to help consumers feel comfortable; I think we need to find innovative ways to get people back into stores,” Michelin said.
“Frankly a lot of stores were slated to open June 1, but couldn’t because of the civil unrest, which heavily damaged a lot of malls,” Michelin said.
It’s added a whole new dynamic to the already unprecedented challenges caused by the coronavirus.
“No one knew the closures were coming,” Michelin said. “When it started, I was in DC and no one knew what we would be dealing with two weeks later. No one was really prepared for shutting down so quickly and how long it would last.”
The chain of events that followed have disproportionately affected the retail sector, which was already struggling at the brick-and-mortar level, Michelin said.
“I don’t know what their contract with Gap is, but I’m a little surprised from a consumer perspective,” Michelin said. “Perhaps they need to be given a little bit of breathing room to get back up to speed, but I’m not privy to their conversations.”