With Next having said it will be looking to insert a clause into its property leases to lower its rent to achieve parity with retailers using CVAs to achieve rent reductions, the recent developments at House of Fraser will add considerable fuel to the fire. More retailers are expected to follow Next’s lead.
It is understood that a group of retail property landlords are working together to protect their interests going forward. Many have significant properties lying vacant in the wake of the collapses of chains like BHS, Maplin, and Toys R Us, with few new tenants in sight, and have been forced to accept rent reductions for stores let to retailers including New Look, Select, Mothercare, and Carpetright as part of the retailers’ respective CVA proposals.
Something has to give.
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