Landlords and property experts have hit back at Mike Ashley’s claims that “greedy landlords” will scupper his plans to save House of Fraser stores.
Mark Williams, president of retail property organisation Revo, said that landlords were “delighted” that HoF had been saved, but was surprised that the Sports Direct boss had felt the need to criticise landlords publicly over lease negotiations for some of the 59 HoF stores.
Williams said: “As an industry body, we are delighted that HoF has been bought, and Mike Ashley is a determined individual who will make a good go of it – he is a negotiator.
“What has surprised us is that he feels the needs to go public about his negotiations. We suspect that he has bought a better business than he anticipated. As with all investors in real estate we want to see the estate occupied in a manner that serves the local community best.”
On Wednesday, Sports Direct warned that “time was running out” to keep stores open. Of the 59 stores in the HoF estate, 48 are expected to remain open. The Hof company voluntary arrangement (CVA) proposals would have closed 31 stores. However, under Sports Direct’s plans, up to 28 stores would not get any rent at all, although business rates and other overheads would be paid.
Drapers revealed that HoF distribution centres, which had re-opened following a payment dispute with Sports Direct, have now closed once again.
One property advisor for landlords on several HoF stores said that the negotiations had been tougher than Sports Direct had initially anticipated: “It looks like they [Sports Direct] are finding it harder to do what they want to do with stores. For many stores, they are proposing a 12-month trial and have offered to cover only overheads for landlords.
“In some cases, that will suit landlords well and will give them time to work up proposals over the year. For others, having stores in limbo will not work at all. Other stores are of the quality where a landlord will feel they can do better.”
One landlord, which has properties across the UK, added that Ashley could be looking to soften the backlash when and if any store closures are announced: “He is looking for stores that are not really viable so if he doesn’t get the deal he wants, the public reaction will be a bit softer.
“The statement looks to be Ashley telling the world that he is trying to save stores but it is an exercise in managing expectations so that if he shuts a shop he can say, ‘The landlord’s being unreasonable’. It’s negotiation.”