In late April, Gap stopped paying rent on its temporarily shuttered stores, amounting to about US$ 115 million in monthly expenses in North America.
Simon malls have 412 Gap stores, including Banana Republic and Old Navy. This makes Gap Simon’s biggest in-line tenant at its malls in terms of rent.
It said then “that strong legal grounds exist to support our claim that we are not obligated to pay rent for the stores that have been closed.”
Simon began reopening malls last month as states started easing restrictions on businesses in an effort to kickstart economic growth.
David Simon, Chief Executive Officer,Simon has made it clear he expects rent to be paid, despite any temporary store closures.
“The bottom line is, we do have a contract and we do expect to get paid,” he told analysts during a May 11 earnings conference call.