Gap Inc. (GPS) - Get Report shares slumped lower Thursday amid reports that U.S. mall operator Simon Property Group (SPG) - Get Report is suing the once-iconic retailer for nearly $66 million in unpaid rent accumulated during the peak of the coronavirus pandemic.
Simon, the owner of retail shopping malls in 37 U.S. states, said last month that even with some of its key retail tenants unable to pay monthly rent amid the lockdown, it would still commit to a quarterly dividend, paid in cash, and fully expects its tenants to honor their lease commitments. The group did not, however, disclose rent collection data for April and May.
Gap, for its part, told investors on April 23 that it expects a 'material' earnings hit from the coronavirus pandemic and warned that cash from operations might not be able to fund the business going forward. It also said it was suspending rent payments on closed stores and negotiating with landlords for further deferrals.
The suit was first reported by therealdeal.com.
Gap shares were marked 2.1% lower in early trading Wednesday to change hands at $11.67 each, a move that would extend their year-to-date decline to around 33.3%.
Simon Property shares were little-changed, at $72.9 each following a 14.8% surge Wednesday linked to a series of Wall Street upgrades based on the continued re-opening of its retail properties around the country.