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.”

Subscription content

Please sign in now if you have a subscription or are already registered with us.

Retail Week

Register for free to continue reading

Retail-Week.com provides premium, in-depth intelligence that helps retailers judge risks, spot opportunities and identify what they need to do to win in the digital economy.

Register today for a taste of our high-quality intelligence and enjoy:

  • Three free articles a month on Retail-Week.com
  • Detailed analysis of current trends and events 
  • Exclusive newsletters
  • In-depth reports, videos, interviews and much more

Discover Retail Week register now

Please note, if you have recently purchased a subscription, it may take a few minutes before your account is updated.