Net loss came in at 932 million US dollars, or 2.51 USA dollars per share, for the three months ended May 2, which included a 484-million-U.S. -dollar writedown on store and operating lease assets and a 235-million-U.S. -dollar charge on excess inventory.
Gap has nearly 2,800 stores in North America and has reopened 55% of its company operated stores in the region. Simon Property Group, the largest mall operator in the country, has sued the company for $69.5 million in unpaid rent across more than 400 properties.
"This online momentum, enabled by new omni-capabilities that have expanded the way customers can shop with us, leaves us well-positioned to fuel our brands going forward", CEO Sonia Syngal said in a news release.
However, the retailer's Q1 online sales increased 13% year-over-year and by 100% year-over-year in May.
San Francisco-based Gap, which operates almost 2,800 stores in North America, said 55 percent of its company-operated stores in the region were now open and sales from online operations were booming. By brand, net sales were down 50% at Gap, with store sales down 64% and online sales down 5%.
Banana Republic Global's sales were down 47 percent; store sales were down 61 percent with online sales down 2 percent.
The retailer said that, since the onset of the COVID-19 pandemic, Old Navy has seen a meaningful acceleration in its digital business. It hopes to reopen most of the rest throughout June. "Of the remaining capital spending in fiscal year 2020, the majority is oriented toward technology and supply chain investments that support changing customer shopping habits, including the expansion of our OH distribution center, critical work that began last year to double the capacity supporting e-commerce demand, a valuable benefit with a dramatic rise in online shopping".
Gap CFO Katrina O'Connell said in its first-quarter conference call on Thursday it's "knee deep with all the landlords today". Gap also cautioned that it might not have the cash to fund operations through the end of 2020. And it reported a quarterly loss of $932 million, or $2.51 per share.