Sunday 17 November 2019

John Mulligan: Retailers throttled by ridiculous rents

JOHN MULLIGAN

Justice Peter Kelly told the High Court that B&Q's petition for examinership told a "depressingly familiar tale" of a company that's being "throttled" by a fall in sales and "totally uneconomic rents".

And as he pointed out, those lease agreements provided for upward-only rent reviews signed up to during a boom that proved to be a "mirage".

B&Q follows in the footsteps of other firms that have opted for examinership in an effort to lower their rents.

Last summer Atlantic Homecare and Woodies DIY stores were placed in examinership. Some of the outlets had been paying rents twice the rate charged on the open market.

In 2011, Xtravision sought examinership as it also pushed to slash its rent bill across the country.

The examiner in that case also had a large number of leases repudiated, or cancelled. On the majority of those repudiated leases, Xtravision had been paying rent on stores it no longer even traded from. But because it had signed long lease agreements, it couldn't wriggle out of its legal obligations. Leases can only be repudiated if the court finds them onerous.

Irish Independent

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