Gap Inc. is suing high-end-mall operator Westfield for allegedly overcharging the fashion retailer in an action that underscores the sometimes-tense relationship between landlords and tenants as e-commerce transforms the retail sector, the Wall Street Journal reported. Other well-known U.S. retailers, such as Starbucks and Saks Fifth Avenue, have duked it out with landlords in court recently as they’ve sought to trim costs amidst a glut of shopping-center space. Mall vacancies in the U.S. recently hit a six-year high, with strip malls and neighborhood centers particularly hard-hit. Gap’s lawsuit, filed in May in a state court in Los Angeles, charges Westfield with using fraudulent accounting that resulted in Gap paying more than its fair share of mall expenses at more than two dozen shopping centers. Gap also sued Westfield’s contractors that provided trash collection, including Waste Management Inc., for charging non-competitive rates that were too high. Read more. (Subscription required.)
Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store.