Financial News
Written by: Lin Leqian
2020-04-24 11:23
Date of last update: 2020-04-24 11:24The American apparel brand GAP warned that due to the new crown pneumonia epidemic, it will face an operating crisis in December and will not be able to obtain sufficient cash flow to maintain operations. Currently, most of its stores are temporarily closed, and the group has suspended payment of store rents in North America The lease terms have been revised, and the monthly rent owed amounts to 115 million US dollars (about 900 million Hong Kong dollars).
GAP said that since February, the company has evaporated about $ 1 billion in cash, and expects to have only about $ 750 million in cash until the end of next fiscal quarter. The current cash flow is not enough to maintain operations, and other actions are urgently needed to find more Sources of funds. At present, more than 80,000 employees of GAP are required to take compulsory vacations, reduce management salaries and suspend renting for temporarily closed stores.
As early as March of this year, when Gap announced the quarterly results for the fourth quarter ended February 1, it is currently difficult to accurately quantify the impact of the new coronary pneumonia epidemic on this year ’s business, but preliminary estimates of the impact of the first quarter of the Asian and European operations due to the outbreak Losses of at least US $ 100 million (approximately HK $ 780 million) dragged down 10 cents of earnings per share and decided to suspend the share repurchase program.
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