Rent cuts and the tough relationship between retailers and landlords
Suzanne Lovell
It’s no secret that a recent flood of rent reductions and store closures has plagued the UK’s retail industry this year, against a backdrop of dwindling footfall and sales, declining consumer confidence and soaring business rates bills.
This has placed pressure on landlords who are now scrambling to avoid vacant units across their estates.
While many of these store closures and rent reductions were undertaken as part of a CVA process, an increasing number of retailers are seeking rent reductions in its own right – without a clear restructure or cost-cutting scheme.
This raises the question as to whether retailers are trying to foolproof their business in a bid to stave off a CVA.
Dan Sweeney, partner at UK law firm TLT, said it was understandable that retailers in certain locations would pursue this tactic.
“In circumstances where some retail locations are suffering from what is now an over-supply of retail space, it is natural that retailers in those locations are seeking to extract a lower rent,” he told Retail Gazette.
Lisa Raymond, a commercial property lawyer at Keystone Law, argued that many properties are over-rented, and the stress shows once the retailer moves in and trades.
“It can’t absorb the expense and so seeks the rent cut,” she said.
In February this year, Monsoon Accessorize asked landlords for……continue reading.
Source: www.retailgazette.co.uk
Photo by Richard Bell on Unsplash