Gap had known for four months that SVES said the goods were wrong. Its own people had already inspected them.
On June 14, 2023, Gap demanded payment in full for ten purchase orders covering 10,060,207 units of Old Navy merchandise. The invoice was $17,655,076.08.
By that date, Gap had known for roughly four months that its customer said the shipment was wrong.
THE SEQUENCE
The sequence is set out in the San Francisco judge’s decision. SVES notified Gap of the discrepancy by telephone and text in February 2023. Gap sent representatives to a warehouse in Miami holding part of the goods. They inspected. They photographed.
On April 27, 2023, Salomon Murciano told Gap on a call that roughly 80 percent of the Old Navy merchandise was extended size BodEquality product and was proving particularly difficult to liquidate.
THE LETTER
Then the letter came.
It was written by Kevin Kuntz, Gap's head of logistics operations and fulfillment, and addressed to a lawyer for SVES. It acknowledged Murciano's April statement. And it answered it: having conducted internal investigations, Gap's internal records found that BodEquality products made up approximately 25 to 30 percent of the total assortment transferred.
The letter pressed further. It called the 80 percent assertion not only factually inaccurate but said it meant SVES's problems reselling plus size goods did not apply to the bulk of the merchandise on which it had withheld payment.
AN OFFER THAT AGED STRANGELY
And then it made an offer that has aged strangely. If SVES disputed Gap's findings about the make up of the assortment, the letter said, Gap was prepared to attend SVES's premises and carry out an on site inventory count.
Murciano testified that he asked Gap to do precisely that. He testified he also spoke with Chris Barker, a Gap representative, who told him these were the numbers Gap was looking at internally. He testified he asked for the supporting papers or an audit.
Gap, according to his testimony, never provided them.
Gap offered an on site count if SVES disputed its numbers. SVES asked for one. It never came.
WHY THE JUDGE WEIGHED IT AGAINST SVES
The judge weighed that exchange against SVES rather than for it. He noted there is no writing documenting the request for the count, no emails, no texts, and reasoned that a company genuinely relying on Gap’s figure would have put the request in writing.
THE SETTLEMENT, AND WHAT CAME AFTER
Months of negotiation followed the letter. On October 3, 2023, SVES and a group of related companies signed a settlement agreeing to pay Gap more than $26 million. Gap reduced the amount it claimed it was owed by $5 million.
SVES paid until April 5, 2024, then stopped. Gap filed suit on May 31, 2024.
In July 2026, the judge held that SVES could not undo the October settlement. He did not decide whether Gap’s 25 to 30 percent figure was accurate.
Gap's own representatives had walked a Miami warehouse with cameras in early 2023. Four months later, the company asked for every dollar.