Jessops renegotiated rental terms with half its landlords by Wednesday’s quarterly rent day, which was the retail sector’s toughest payment day in 18 years.
The camera specialist, which is struggling with debts of nearly£60m, has agreed monthly rents with 40 per cent of its landlords, plus rent reductions and rent holidays with a further 10 per cent.
The Jessops deals – struck over a period of months – show that hard-pressed retailers can still negotiate improved terms and landlords are keen to do deals rather than face voids. A large number of retailers such as Robert Dyas and Focus are pressing for better property terms.
Jessops executive chairman David Adams told Retail Week: “We have no issue with rents. We’re making good progress with landlords. We’re not threatening them, we’re not saying we won’t pay. We’re negotiating.”
The British Retail Consortium warned that the quarterly rent payment deadline that passed on Wednesday was the hardest for nearly two decades, and has urged landlords to show more flexibility on rents to avoid the collapse of struggling retailers.
Pali International analyst Nick Bubb said that Jessops’ characteristics would have helped in talks with landlords. “Jessops is a specialist, and shopping centres need good specialists. Landlords are clearly keen to have a shop that will add to the mix,” he said.
Adams said that “trade’s not going too badly”, adding that Jessops
has passed on most of the price rises driven by the exchange rate, because customers are willing to pay for products of high quality.
He said that the retailer’s banks remain supportive. “Clearly we can’t continue with the position where you’ve got nearly£60m of debt and earnings of less than£5m, but that’s what we’re talking to the bank about,” he said.
Jessops like-for-likes slipped 1 per cent in the seven weeks to March 15 and dropped 3.5 per cent in the 24 weeks to March 15.
Last week restructuring specialist Alan Fort began working with
Jessops. Adams said Fort is “helping to implement a management plan and has not been parachuted in by the banks to implement some sort of bank plan”