// Primark withholding quarterly rent payments on 110 leasehold properties in the UK
// It did this to prompt ”urgent” conversations with landlords over ongoing rental terms
// Primark is asking landlords to support their lease agreements to mitigate the impact of coronavirus
Primark has withheld its quarterly rent in a bid to force landlords to consider revising terms urgently as the coronavirus pandemic decimates the fashion retailer’s trading.
The move pertains to 110 of the value retailer’s leasehold properties in the UK, and the quarterly rent was due yesterday.
Primark has written to landlords asking them for their support on lease agreements to mitigate the unprecedented financial impact of the pandemic on the business.
READ MORE:
- Primark, Edinburgh Woollen Mill temporarily close stores due to Covid-19
- Primark shares suspended for an hour after coronavirus store closures
- Primark owner issues supply warning from coronavirus amid sales growth
Primark parent company AB Food’s finance director, John Bason, told Retail Week that they want to “sit down with landlords” and address both scheduling and quantum of payments.
He added that Primark was a “long-term investor in the high street and that’s not going to change”.
Primark, which doesn’t trade online like many of its high street fashion rivals, temporarily shut all 189 of its UK stores over the weekend ahead of Prime Minister Boris Johnson’s wider retail lockdown announcement on Monday night.
As a result, it now faced a £650 million loss of sales per month now that its stores in the UK and abroad are temporarily shut due to the pandemic.
Primark revealed over the weekend that it had cancelled all new clothing orders from suppliers, such as factories in India and Bangladesh, but said it would continue to honour orders already shipped or delivered to Primark warehouses or stores.
“This situation has been so fast moving,” Primark chief executive Paul Marchant said at the time.
“We could not have foreseen that over the course of a week, our stores in every country in which we operate, with the exception of the UK, have had to close.
“We have therefore been left with no option but to take this action.
He added: “This is unprecedented action for unprecedented and frankly unimaginable times.”
While Primark has no ecommerce site that could offset the lost sales, AB Foods has an FMCG division that has been relatively unaffected from the pandemic thanks to soaring demand in grocery.
Click here to sign up to Retail Gazette‘s free daily email newsletter
