Dive Brief:

• Gap Inc. on Thursday disclosed that this month it stopped paying rent, saving about $115 million per month in North America alone, according to a filing with the Securities and Exchange Commission. In more than 90 countries, the company runs about 3,300 stores, 2,785 of them in North America, and franchises about 570 stores globally.

• The retailer also said it's negotiating with landlords on lease terms, including rent, but may close some stores permanently where that isn't fruitful, according to the filing.

• Gap — having already furloughed workers, suspended stock repurchases, deferred and suspended dividends, reduced 2020 capital expenditures by about $300 million, cut executive pay, shifted inventory and tapped its entire $500 million revolving credit facility — said it must consider doing more, including new debt or other short-term credit, further spending cuts, workforce reductions, merchandise delays and vendor payment extensions.

Dive Insight:

In its filing, Gap Inc. thoroughly discussed the devastating impact of the COVID-19 pandemic, but warned that, even as the outbreak eases, its misfortune may very well not.

"[C]onsumer fears about becoming ill with the disease may continue, which will adversely affect traffic to our and our franchisees' stores," the company said. "Consumer spending generally may also be negatively impacted by general macroeconomic conditions and consumer confidence, including the impacts of any recession, resulting from the COVID-19 pandemic."

That caution came a day after UBS analysts led by Jay Sole said they anticipate a bleak environment for apparel sales for several more weeks, writing in emailed comments that they are "getting more pessimistic about what happens after July."

Indeed, like Gap, they pushed back on the consensus notion that sales will pick up as stores open, arguing that "consumer confidence, not store reopenings, will be the key apparel sales lead indicator." They cite data showing that "consumers are preparing for a long economic slowdown," with 46% of consumers believing that it could take at least a year for the economy to recover, and a great majority expressing disinterest in discretionary consumption like apparel.

Furthermore, it's unclear exactly when stores will unlock their doors, or how many actually will. Gap Inc., in its filing Thursday, is the first major retailer to say it out loud: Many stores temporarily shuttered to support social distancing during the pandemic won't ever reopen, notes Credit Suisse analyst Michael Binetti.