Categories: Legal

Simon Property Group Hits Gap With Lawsuit To Recoup Back Rent

All eyes in the retail sector are now on Simon Property Group, as the mall giant hauls The Gap into court for failing to pay rent amid the coronavirus shutdown.

In the first major retail rent showdown of the pandemic, Simon has filed a complaint in state court in Delaware seeking $66 million in back rent owed by The Gap, which also owns Banana Republic and Old Navy.

The lawsuit, first reported by The Real Deal, comes after David Simon, CEO of the company, which owns malls in 37 states, fired off a warning last month to retail tenants who might be considering skipping their rent payments.

“The bottom line is, we do have a contract and we do expect to get paid,” Simon said during the May 12 earnings call with analysts.

However, The Gap, like many other retailers, has seen its revenue fall off a cliff since March, when the clothing retailer was forced to shutter stores across the country.

In April, The Gap said it would be suspending $115 million in monthly lease payments on stores in malls and other locations across North America. The retailer also said at the time that it was in talks to renegotiate or terminate leases and to close stores entirely if necessary.

The announcement came as The Gap cut staff, furloughed workers, slashed expenses and put $300 million in capital improvements on ice.

The retailer, which has 412 stores in Simon malls, saw its stock price drop initially after news of the lawsuit broke, but later edged up 1.09 percent to $12.08 a share on mid-day Thursday (June 4).

Shares of The Gap were buoyed earlier in the week by the results of a survey by S&P Global Market Intelligence, which found that 44 percent of consumers plan to get out and shop at retail stores once coronavirus restrictions are lifted.

Simon’s stock price, however, fared the better of the two on Thursday, rising 3.88 percent to $75.71 a share.

Get our hottest stories delivered to your inbox.

Sign up for the Newsletter to get updates on top stories and viral hits.



Digital transformation has been forcefully accelerated, but how does that agility translate into the fight against COVID-era attacks and sophisticated identity threats? As millions embrace online everything, preserving digital trust now falls mostly on banks and FIs. Now, advances in identity data and using different weights on the payment mix afford new opportunities to arm organizations and their customers against cyberthreats. From the latest in machine learning for fraud and risk, to corporate treasury teams working in new ways with new datasets, learn from experts how digital identity, together with advances like real-time payments, combine to engender trust and enrich relationships.

Recent Posts

Yotpo Joins UPS eCommerce Tech Program For SMBs

Yotpo, the New York-based eCommerce marketing platform, has been selected as a partner by the UPS Customer Technology Program (CTP)…

24 mins ago

Fortune Favors Cross-Border Payments

With the volume of cross-border B2B payments projected to hit nearly $6.5 trillion by 2024, it’s small wonder that so…

49 mins ago

Combating ATOs With Multifactor Authentication, Behaviors Analysis And Customer Education

Much has been said about the viability of biometrics for guarding against bad actors, but financial institutions (FIs) cannot simply…

2 hours ago

How Self-Serve Onboarding Is Powering Real Estate Deals

The pandemic has fundamentally changed all aspects of real estate, and time-consuming procedures like onboarding and ID verification for prospective…

2 hours ago

Logistics, Supply Chain Tech Lead B2B Funding This Week

Taulia, a B2B FinTech startup, made headlines this week thanks to reports that the company is raising funds from Ping…

2 hours ago

How Cannabis Can Become A B2B Payments Innovation Influencer

The legal cannabis market's financial services challenges are, by now, well-known. For several years, while state-level legalization has expanded, access…

2 hours ago