Primark demands rent cuts as rivals benefit from CVAs

Primark chiefs are “hacked off” that other retailers are gaining a competitive advantage from lower rents as a result of implementing the insolvency process, The Sunday Times reported.

The value fashion giant, which has 189 UK stores, wants to pay less on leases that still have several years to run. In return for concessions by landlords Primark is offering to invest in refurbishments and extend leases.

Primark has invested heavily in its store estate, including a new Birmingham flagship.

Primark is the latest successful retailer to demand lower rents to reflect the changing retail property environment. Next, for instance, has secured reductions averaging 29% on rents renewed last year and bookseller Waterstones is also thought to have achieved reductions.

Strong retailers are increasingly angry that they bear property costs out of kilter with those paid by flailing competitors that have struck new terms using CVAs.

Fashion groups Arcadia and Monsoon are among those to have offloaded property and cut rents in that way.

One landlord told the newspaper: “Primark’s property team has been told by senior executives to go and get rent reductions.

“They are looking at CVAs and are hacked off that they are losing a competitive advantage. They want a slice of the action.”

Landlords, angry at the money they are losing as a result of retailer CVAs, have shown themselves increasingly willing to oppose the process.

However, they have typically accepted deals as preferable to companies going bust.