Retailers contest high rentsMonday, 17 August 2009
Retailers plan a second big push for rent reductions after a series of financial reorganisations at struggling competitors that have forced concessions from landlords.
A number of High Street and out-of-town retailers contacted by Financial Mail say they intend to bring forward talks and negotiate early on contracts that end in the next three or four years.
'Where 15 or 20-year leases are due to expire, we want to re-gear on better terms,' said a retail chief executive at one national chain.
'The world has changed, but we are still paying rents as if it was the boom times. Unfortunately, the position we will have to take is that where landlords are unable to agree, they will be facing another empty store.'
Landlords will benefit from the certainty that stores are guaranteed to be occupied for longer periods, he said.
Retailers are already preparing the push on an individual basis and negotiations are expected to begin in earnest in January, once businesses have gauged the success of Christmas.
It is a year since retail tycoon Sir Philip Green and Lord Harris at Carpetright first began their campaign for better terms on leases. Retailers still pay three months in advance on most stores and payment reviews are always upwards only.
They want to change payments to monthly with the possibility of payment reductions should conditions deteriorate.
Mike Sheath at retail consultancy Capa said he was advising several profitable firms on their leases. JD Sports property director Nigel Keen said: 'Good retailers are effectively being penalised for their success. In numerous locations around the country we're not competing in a fair marketplace.'