Senior Primark boss says High Street landlords face reckoning as coronavirus leads to ‘new reality’
‘New reality’: Social distancing is expected to hamper store sales for many months
High Street landlords face a reckoning as coronavirus leads to a ‘new reality’, according to a senior Primark executive.
John Bason, the fashion retailer’s finance chief, said the virus has led to a ‘step change’ for rent reductions, massively accelerating a trend caused by the decline of the High Street.
Billions of pounds of the March quarterly rent bill was not paid and landlords are braced for an even worse outcome this month.
And the impact of the virus will outlast the lockdown as consumers are used to shopping online.
Social distancing is also expected to hamper store sales for many months when ‘non-essential’ shops reopen on Monday.
Bason said: ‘Covid is a step change in rent renegotiations. The pace of change in the High Street was already picking up for a number of years, led by a move to online.
‘Covid has underlined that. There will be no doubt in my mind that when new leases are agreed, that the price will reflect the new reality.’
Retail property groups are bearing the brunt of the changes.
This week Shaftesbury reported a £287m loss after the values of its properties dropped by £300m due to coronavirus.
Struggling Intu collected just 29 per cent of rent on March’s rent day, Hammerson received 37 per cent and British Land was paid 43 per cent of due rent between March 2 and April 30.
Zara announced steps this week to shut up to 1,200 of its 7,400 outlets across its international business to focus on larger ‘destination’ stores and its online shop.
Travelodge launched an insolvency procedure called a Company Voluntary Agreement to slash rents across its 560 hotels after claiming it would lose £350m of revenue this year.
Restaurant Group has shut 125 Frankie & Benny’s restaurants.