// H&M has clashed with landlords over turnover-based rents
// H&M asked landlords to deduct returns from stores’ revenues
H&M has reportedly entered a brawl with landlords after demanding terms that meant property owners would have to bear the cost of the increased number of returned clothes.
The fashion retailer is reportedly offering landlords “total occupational deals” where they discuss with landlords a sum linked to the amount of sales the store makes and leaving them to divide it between service charge, rent and business rates.
H&M is not only pushing for turnover-based rents, but it is also insisting that if any returns come into store, including online purchases, then they would be deducted from that shop’s revenues,” The Times reported.
This would put further pressure on landlords’ retail property values.
Turnover rents are fairly new to the UK and illustrate the shift in power between landlords and retailers.
“Like every retail business, we work with our landlords to draw up lease agreements that allow us to run a successful store portfolio,” H&M said.
“We won’t discuss the details of individual contracts as we consider this information to be commercially sensitive.”
In the past decade, H&M has increased its brand portfolio by adding Cos, Monki, Cheap Monday, & Other Stories and Arket to its group.
It currently has 4739 shops in over 62 countries with 304 in the UK alone.
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