Frasers' Murray blasts Westfield on rent as staff work while furloughed
Frasers Group property chief Michael Murray has accused the bosses of shopping centre owner Westfield of having “their heads in the clouds” and warned that their properties will turn into “ghost towns”.
The executive said Westfield did not realise the scale of disruption facing the retail industry after a proposal to link store rents to sales was rejected.
Frasers Group, formerly Sports Direct, has offered to pay 50% of its rent commitments during the government-mandated lockdown. In the long term, the retail group wants to tie its rent deals to store sales, reported The Times.
But Westfield, which has two large shopping centres in London, appears to be resisting the new leasing structure.
It comes amid escalating tension between retail brands and landlords over rent. Already under strain from the rise of e-commerce and the decline of the high street, property owners are under intense pressure to help tenants struggling during the coronavirus crisis.
Many national and international chains including Debenhams, New Look, Primark, Frasers Group and Matalan have asked landlords for rent breaks as they battle to face the economic impact of Covid-19. Intu, a mall operator, said last month it received less than 30% of rent in the March quarter, forcing it to request lenders to waive its borrowing terms.
Frasers Group has temporarily closed hundreds of stores in the UK despite Mike Ashley’s earlier intention to keep Sports Direct and Evans Cycles open during the lockdown.
But a number of furloughed store staff have accused the group’s core chain Sports Direct of taking advantage of the Government’s Coronavirus Job Retention Scheme. According to a report from The Guardian, two managers said they are being called into work at least once a week to help pack up store stock so it can be sold online.
The scheme, which covers 80% of staff salary, is offered to UK companies during the lockdown. To be eligible, employees cannot undertake any work on behalf of a firm when on furlough.
“They are doing it secretly so people don’t know what they are doing,” a manager, who wished to remain anonymous, told The Guardian.
The group is thought to be preparing for the eventual lifting of some lockdown restrictions by asking managers to return to work on 90% pay to ensure stores are ready to reopen.
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