Retailers Take Alternative Approach to Leases

Shopping centre and high-street landlords have been asked to lower rents on unprofitable stores as struggling retailers seek ways to keep their businesses afloat and cut costs. But property owners have grown increasingly resistant, prompting some chains to consider an alternative approach, the Financial Times reported. Last month Philip Green was forced to tweak a plan to close or secure significantly lower rents on stores leased by his Arcadia business. He pledged to invest £100m into the company, which owns Topshop and Miss Selfridge, after landlords refused to back a more aggressive restructure with deep rent cuts. The landlords revolted after feeling pushed into a corner by chains saying they would collapse if they could not secure company voluntary arrangements, a form of insolvency that permits store closures and rent forgiveness deals. Between 2016 and 2019, the number of retailers that agreed CVAs doubled, according to PwC. Read more