Primark is looking for 30% reductions in rent. Photograph: Florian Gaertner/Photothek via Getty Images

Primark seeks a reduction in the push of rent cuts

Aminy Andawi
Business & Industry
Retail & Food Services
Jul 29, 2019
1842
Primark is seeking a reduction on shops for contract renewal and pushing for rent cuts to bring its cost in line with other rivals that have to proceed to slash payments to landlords. The situation has been discussed with landlords over lower rents where the lease contracts are coming up for renewal.

The strategy comes after Monsoon and Topshop owner demanding lower rents as part of a program known as company voluntary arrangements (CVAs). The strategy has become popular among other retailers who have struggled with high-cost rent and online shopping.

According to the Sunday Times, Primark is seeking rent reductions up to 30% and earlier this year, Primark cut its rent by 29% for 28 leases over 2018. As the leases come to an end, Primark is seeking for new agreements that reflect the current market which often lower than the past rates.

Rivals are shutting down its stores with a total of 75,000 retail jobs lost since last year, causing the high street conditions forcing the owner of footwear chain office to become the latest retailer to consider a CVA. Furthermore, the landlords for Sir Philip Green’s group approved a restructuring plan which will keep the company from falling and save almost 17,000 jobs.

Source: https://www.bloomberg.com/amp/news/articles/2019-07-28/primark-seeks-rent-cuts-after-rival-insolvencies-sunday-times

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