Primark is withholding quarterly rent payments, due today, on its leasehold properties in the UK in a bid to prompt ”urgent” conversations with landlords over ongoing rental terms.
The value retailer has written to landlords informing them it will be withholding the quarterly rent payments on its 110 leaseholds stores.
The letter asks landlords for their support on lease agreements going forward to mitigate the financial impact of coronavirus on the business.
Primark, which doesn’t trade online, was forced to close its 189 UK stores on Sunday. The retailer has faced a £650m loss of sales per month across its global portfolio due to closures.
Primark now wishes to have “immediate” discussions with its landlords over “the quantum and timings” of ongoing lease payments, John Bason chief financial officer at the retailer’s owner, Associated British Foods, has told Drapers.
“Everything is on the table,” said Bason in regards to the lease terms negotiations.
“It’s a step we’re not taking lightly but it underlines the magnitude of what we’re looking at here,” he said. ”We closed the UK estate on Sunday and here we are three days later on one of the quarter [rent deadline] days.”
“We’re saying there is an urgency to sit around the table and we’re asking for their help.”
Bason added: ”We value our relationships with the landlords, they are a very important counterpart for us and we look forward to resuming a normal trading relationship as soon as possible when the stores reopen.”
It comes after Drapers revealed that Primark has written to suppliers asking them to put a halt on all current and future production and the purchasing of any materials for the retailer.
Drapers understands that Primark will continue to honour all orders already shipped or delivered to its warehouses or stores.