WHSmith joins retailers renegotiating with landlords over rate payments

WHSmith has been plunged into a major pay row with investors amid heightened tensions over boardroom rewards
The revolt threatens to turn WHSmith into the year's first big target of a 'fat cat' pay row.
// WHSmith will look to switch from payments in advance to payments in arrears
// Retailer’s high street performance over Christmas saw sales drop 5%
// WHSmith joins Next, Sports Direct and River Island in turning the pressure over to landlords to help high street woes

WHSmith is considering asking landlords to allow its rents to be paid in arrears.

The book, magazine and stationery retailer has around 300 leases coming up for renewal.

According to The Sunday Times, WHSmith will ask landlords to switch from the industry standard of receiving payments in advance to receiving rents in arrears.

READ MORE: WHSmith’s Christmas travel sales offsets poor high street trading

The move will help the retailer’s cashflow.

Last month WHSmith revealed its high street sales were down five per cent in the 20 weeks to January 18, while its travel arm saw revenue rise 19 per cent.

“Our high street strategy continues to deliver through continued gross margin gains and tight cost control,” said chief executive Carl Cowling in light of the trading results.

Last year WHSmith achieved an average rent cut of 35 per cent on leases that came up for renewal.

The retailer is currently paying in arrears on a handful of high street stores.

WHSmith is the latest in a series of retailers looking to ease the weight of the industry’s high street woes by renegotiating with landlords.

Back in 2019 River Island looked to reduce rents across the majority of its 270-store portfolio.

Meanwhile Next plc has added a clause into its property leases to lower its rent in response against a wave of cuts landlords are providing its high street peers.

According to The Sunday Times, the clause allows the retailer to ask landlords to agree to rent reductions on stores where a neighbour receives a similar deal through a company voluntary arrangement (CVA).

Mike Ashley has also reportedly pressured landlords to agree that all new rent deals across his Sports Direct retail empire are linked to sales.

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