Retailers, pushed to breaking point by the coronavirus pandemic, are staring down their powerful landlords. Neither wants to flinch first in the stand-off over rental payments, and both sides have plenty to lose | simonjohanson domp
Veteran retailer Peter Sheppard's eponymous upmarket shoe store at the entrance to Westfield’s Pitt Street mall in Sydney was thriving before the pandemic hit.
“I’m stirred up on this," he said. "I have said to Westfield: ‘If you don’t do this, we’re going to walk. We’re going to take our fixtures and fittings, our stock, our staff, and, more importantly, we’re going to take our customers and we’ll move to a friendly leasing environment'." Consumers forced to steer clear of stores may never return, while Australia's glittering shopping malls run the risk of turning into empty husks.
Countering the retailers' threats, legal letters are being sent by determined landlords to their most stubborn tenants, with Scentre the first to make good on its stance, locking Mosaic out of 130 stores nationally after the two were unable to reach an amicable agreement.This week, Mosaic hit back, with the Noni B, Rivers, Millers and Katies owner telling landlords it would close as many as 500 stores across its network as the company reels from a $212 million loss.
CEO of Scentre, Peter Allen, seeks to defend the annuity-style rental income for his trust's security holders."That makes no sense," he said. "I don’t know where the mindset comes from that a level of sales is a function of rent. Retailers pay rent out of profit, they don’t pay rent out of sales." I don’t know where the mindset comes from that a level of sales is a function of rent. Retailers pay rent out of profit, they don’t pay rent out of sales.Mosaic's chairman Richard Facioni also doesn't hold back. "When you've got retailers out there collecting JobKeeper and using the money to pay dividends, and recording profit increases while still negotiating hard on rent, it does make it harder for the rest of us.
The real estate sector, for years the bedrock of reliable stable returns for mum and dad investors, is not going give up without a fight.However, unfortunately for landlords and tenants, the bitter stoush over rent is just one plank of several accelerating structural shifts across the retail sector. American malls are double the size per head of population and not anchored by foot-traffic-boosting supermarkets and fresh food stores like Australian centres are, he said.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Sharing the risk: Retailers and their landlords face a post-pandemic dilemmaThe COVID-19 crisis is accelerating trends in the retail sector that will force retailers and their landlords to develop new relationships - whether they like it or not.
Read more »
Kmart’s online store stock levels ‘glitch’ angers shoppersShoppers are showing their frustration at Kmart’s low stock levels and a website glitch which only shows items are out of stock at the very final stage of the checkout process.
Read more »
ACT records worst-ever budget deficit as COVID-19 pandemic flattens government financesThe ACT Government's fiscal update details the effects of an 'extremely challenging 2020', including record collapses in revenue and economic activity.
Read more »
Australia Post revenues grow 7% after pandemic-induced parcel boomMore Australians shopping online during the coronavirus pandemic has been a boon for national postal service Australia Post.
Read more »
Ultra-rich stockpile cash in pandemic as fears for US economy growA group of multimillionaire investors in the US are hoarding cash at unprecedented levels on fears over the economic damage of the coronavirus pandemic.
Read more »
Pandemic could set back gender pay battle by a decade, federal agency warnsExperts have issued a grim warning about the coronavirus pandemic's effect on the gender pay gap, with the Federal Government's Workplace Gender Equality Agency labelling it 'a calamity for Australian women'.
Read more »