The US-based fashion label GAP Inc. is reportedly taking legal action against high-end-mall operator Westfield. The apparel retailer and manufacturer alleged that it was being overcharged of at least US $ 1.83 million by Westfield.
The American fashion retailer filed a lawsuit in California state court in Los Angeles two months back, alleging that Westfield used deceitful calculating methods that forced Gap to pay above its share of expenses at around 25 shopping centres, the Wall Street Journal revealed in a report.
Notably, the standard mall leases generally provide landlords with the power to charge tenants for their proportional share of expenses such as; taxes and maintenance fees. Gap’s filed report states that its share of expenses was measured based on the ‘gross leasable area’ of a property, meaning the smaller the size of the property, the more Gap pays proportionally.
The fashion retailer also claims that department outlets and shops with a ‘primary exterior entrance’ could be excluded from the gross leasable area. However, the company put forth their word that vacant department stores should not be included and said that Westfield improperly counted some of these empty stores, and even counted movie theatres as department outlets.
Interestingly, the plaintiff (GAP Inc.) is still awaiting a legal response from the defendant (Westfield) on this matter. As per the lawsuit filed, Westfield agreed that it owes Gap Inc. US $ 1.83 million through 2015 but has not paid any amount till date, elucidating that first an agreement to a global resolution of all of the overcharges must be reached.
