Frasers Group withholds rents until trading returns to normal - report
Frasers Group has reportedly thrown down the gauntlet to its landlords and said that it won't pay its rent bills until it’s “fully able to freely trade as a business” again.
It comes as a number of other major names are in urgent talks with landlords about making rents more reflective of current trading conditions. Some have gone as far as to put businesses into administration and buy them back in order to renegotiate rent deals.
Frasers, which owns a raft of chains including House of Fraser, Flannels, Jack Wills and the giant Sports Direct operation, closed all of its shops during the UK’s lockdown. Although they’re now open again, they’re operating far from normally due to social distancing regulations and low footfall.
The company’s refusal to pay its rent was reported by Estates Gazette, which claimed it was accompanied by the retail giant saying it won't do so until its trading is at a level that the business and its landlords had expected when its rental terms were first agreed.
The trade paper published a letter that Frasers Group sent to its landlords in which it said: “We write to confirm that we shall not be making any rental payment in respect of the property that we occupy until we are fully able to freely trade as a business at this location and the level of trade reaches a level which the parties would have envisaged when they drew up the lease.”
It also criticised property owners and added that it would have expected landlords to suspend rental obligations during the lockdown, saying that not being able to trade meant that the deals it originally struck as a tenant weren’t operating. “A tenancy of a property which could not be used for trading was not the deal we made as tenant. The whole purpose was for us to be able to trade,” it said.
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