Gap Inc plans to issue new bonds backed by assets including real estate as one financing option to get it through the coronavirus pandemic. The San Francisco-based retailer had about $1.2 billion of long-term debt, not including liabilities from its leases, as of year-end.
Gap has almost 4,000 locations in 42 countries, of which 3,345 were company-operated, according to its latest quarterly results. Its brands include Gap, Banana Republic, Old Navy, Athleta, Intermix, Hill City and children’s clothing chain Janie and Jack. The company’s shares declined about 56 per cent this year, giving it a market value of $2.9 billion.
The brand continues to sell through its online business, which generated more than $4 billion in net sales in fiscal 2019, according to its website. It also announced a series of proactive financial measures to counter expected losses from the closures and strengthen its balance sheet, including the deferral of its April dividend payment. The retailer also drew down completely on its $500 million revolving credit facility. The retailer values its non-retail real estate assets at more than US$1.4 billion, and is in talks with its bank lenders about obtaining asset-based loans.
