Bill Grimsey, boss of DIY chain Focus, has written to Business Secretary Lord Mandelson to flag up the “heavy-handed” behaviour of landlords that refuse to grant retailers monthly rents.
In the letter, Grimsey told Mandelson that the quarterly rent payment model is outdated and unfair and that the banking sector – which has been bailed out by the Government – is refusing to let some landlords offer monthly rents.
He told Retail Week: “It’s important Mr Mandelson understands that we all need to adapt to the economic crisis in partnership. We need to reinvent the rule book if we are to succeed.”
Grimsey explained some landlords that want to co-operate with retailers are having the kibosh put on them by their banks, therefore having to leave retailers in the lurch. “This is a bit rich when banks have been bailed out by government and industry has not,” said Grimsey.
Focus has asked all its landlords to accept monthly rents and Grimsey said the majority have agreed, but others have threatened the retailer with bailiffs.
“We’re very pleased with the reaction of the majority of landlords, who understand the economic outlook we’re facing,” said Grimsey. “However, one or two large industrial landlords are threatening legal action if we move to monthly rents, which we find very disappointing.”
While Grimsey would not disclose which landlords have refused monthly payments, he said they own 10 of the retailer’s 180 stores.
He added that trading remains tough but that the management team is taking the right action. “We’ve taken costs out, we have great co-operation with our suppliers and now with our landlords. We’re well placed to weather the storm.”
This week rival DIY chain Kingfisher also spoke out about monthly payments, stating that the option should be available to all retailers, not just those in financial trouble.
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