Gap reports $932m quarterly loss due to coronavirus closures
Gap this morning reported a quarterly loss of almost $1bn after the clothing retailer was forced to close its stores during the coronavirus pandemic.
The US retail giant reported a net loss of $932m, or $2.51 per share, in the three months to 2 May, including a $484m writedown on store and operating lease assets and a $235m charge on excess inventory.
The company, which owns the Gap, Banana Republic, Old Navy and Athleta brands, said sales in the first quarter were down 43 per cent due to coronavirus-related store closures.
Around 90 per cent of Gap’s stores around the world suffered temporary closures during the outbreak, although more than 1,500 North American stores have since reopened.
Gap chief executive Sonia Syngal said: “Today we have more than 1,500 stores open in North America, ahead of plan, and as stay at home restrictions ease in many markets, we expect to have the vast majority of our North American stores re-opened in June.
“We are optimistic that the actions we’ve taken will provide a stable foundation as we navigate near-term uncertainty and refashion Gap for long-term growth.”
“While we are pleased that store traffic and productivity is exceeding expectations, particularly at Old Navy and Athleta, we continue to plan conservatively as significant uncertainty remains ahead,” said finance chief Katrina O’Connell.
“We intend to lean into our best-in-class supply chain and advantaged omni-channel capabilities to respond as customer demand becomes clearer.”