Gap Sued Over Unpaid Rent at Midtown Manhattan Store

(Bloomberg) -- In another sign of the stress faced by retailers whose stores are shuttered by the coronavirus outbreak, Gap Inc. is being sued for not paying rent for a store near New York City’s Times Square.

The landlord of the Gap store at 1212 Avenue of the Americas says the apparel giant failed to pay rent for April and May, along with water charges and snow removal, leaving the company with an unpaid bill of $530,334.

Covid-19 stay-at-home orders have closed most of the nation’s clothing stores, with traffic plummeting 99% year-over-year in the latest week, according to Bloomberg Intelligence. The San Francisco-based company said last month that it had suspended about $115 million worth of rent payments for its stores in North America.

While it was seeking to renegotiate the leases and continue to suspend rent, it acknowledged in an April 23 filing that landlords could allege default “although we believe that strong legal grounds exist to support our claim that under common law we are not obligated to pay rent for the stores that have been closed because of the governmental and public health authority orders.”

Gap didn’t return a request for comment.

In addition to back rent, Gap’s landlord, 48th Americas LLC, is asking for attorneys fees of at least $20,000.

The suit was filed Monday in federal court in Manhattan.

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