H&M threatens to walk away from leases without post-coronavirus sales revival

H&M store

Swedish fashion giant H&M has threatened landlords with walking away from store leases if they do not see a return in turnovers to pre-coronavirus levels once the pandemic passes.

H&M has written to landlords asking them to agree to terms that could see the retailer break a store lease with one month’s notice if trading conditions did not return to pre-outbreak levels.

In a separate letter, seen by Retail Week, the fashion retailer also pushed landlords across its 300-plus store estate to agree to a variety of rent-free periods on current base rents, a reduction in service charges to reflect drops in footfall and a change to paying rents monthly in arrears. On stores operating on turnover lease models, H&M is requesting that on account rent be removed.

The letter said: “In all of the above scenarios, H&M is to have the right to close stores immediately without being in breach of the keep open clause” and “personal concessions are to remain and fixed rents will not be payable.”

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