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Sports Direct seeks turnover deal on Republic stores’ rent

Sports Direct is looking to secure turnover-based rents for its newly acquired Republic stores as it aims to bring the retailer back to its branded roots.

The sportswear giant, which aims to retain as many as possible of the 116 Republic stores it acquired out of administration two weeks ago, is offering landlords 15% of stores’ turnover to cover rent, service charges and rates.

Sports Direct boss Dave Forsey told Retail Week that its initial conversations with landlords, including British Land and Capital & Regional, had been “very positive”.

The initiative could signal a shift in Republic’s store estate. Forsey admitted that some developers might not find the structure appropriate in certain high-profile schemes, but the retailer is prepared to relocate to other developments owned by the same landlord.

“We have an excellent ops team, it will take us just a few weeks to make it happen,” he said.

Forsey believes that lease structures of this kind are the future of retail. “Given the number of voids on the high street, retailers’ relationships with landlords are coming to the fore. We’re doing something that’s really innovative that should be mutually beneficial,” he said.

He expects renewed contracts with landlords to retain some flexibility, such as break clauses to allow landlords to exit if they become unhappy with the arrangement. Property agent CBRE is acting for Sports Direct.

The sportswear Goliath unveiled its turnaround plan for Republic to sell its proposed leasing structure to landlords.

Readers' comments (5)

  • 15% to cover rates, rent and service charges - so in some cased the landlords will zero rent and in others they have to pay the service charges! Interesting......watch this space.

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  • Mark Ashton

    No brainer.............

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  • 15% to cover rates, rent and service charges - so in some cased the landlords will zero rent and in others they have to pay the service charges! Interesting......watch this space.

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  • Sounds perfectly reasonable to me.

    25 years ago when we took our 1st lease the old rule of thmb was Gross Turnover = 10 X rent. And that was when the rates bill wasn't some gigantic chunk and the council collected the rubbish.

    This 1st store paid 23k rent and it used to TO about 280k pa. I don't ever remember having a stress about paying the bills, things ticked over well on that margin.

    Will the LL say no to their offer? And if they say yes what happens to the tenants paying a whole lot more? They will want the same deal as well.

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  • Mike and his team are the best in retail at the moment, you might not like what they sell and how they do it but they are clearly doing something right and making more money than most on the high street, about time the landlords got a kicking in my veiw as they have had it too good for too long. when are they going to wake up and realise the internet is taking sales from there centres and adapt - the only other issue is rates but the goverment and Mary seem to have brushed this to one side, this is what will kill the small towns in the end! 15% i think he is been reasonable i would have done 10%..... after all we dont work for landlords or do we!

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