Primark is demanding 30% rent cuts on dozens of stores to level the playing field with high street rivals who have used company voluntary arrangements to cut costs.
The value retailer is asking landlords for reductions on stores where leases have several years left to run, and is offering to either extend the lease or invest in refurbishment in return, the Sunday Times reports.
One landlord informed the newspaper that Primark’s property team has been told to get rent reductions amid concerns the retailer is losing a competitive advantage.
Primark has continued to invest in its bricks-and-mortar offer, and opened its largest store to date in Birmingham in April.
In a statement, Primark said: “We don’t comment on the detail of commercial negotiations, but in principle we may on occasion look to secure rent reductions in circumstances where we are offering to extend leases on stores, or where we are investing in the property, thereby increasing the underlying value of the property. Similarly, as leases come to an end, we seek new agreements that reflect the prevailing market rental rate for the property and its circumstances. In the current market, those rates are often lower than past rates.Like any responsible retailer, we have a duty to our shareholders to maintain a competitive cost base, and we seek to maintain good relationships with our landlords.”