By Hugh Radojev2019-09-24T16:23:00
The Australian owner of stationery retailer Smiggle has laid the groundwork to increase the pressure on landlords in upcoming lease negotiations by aligning store fit-out costs with break clauses.
Smiggle’s parent company Premier Investments has put plans in place that would allow the retailer to either drastically reduce rents or walk away from 117 of its 134 UK stores, as it nervously eyes a “very distressed and uncertain macroeconomic environment”.
In a bid to maximise leverage on landlords, Premier has taken a A$25.9m (£14.1m) hit on its balance sheet this year as a means of bringing the fit-out costs for the majority of its UK stores in line with the five-year lease breaks it negotiated in its leases when it first came into the UK market in February 2014.
This allows for the retailer to walk away from the majority of its stores in the future without incurring any future costs of closure.
Please sign in now if you have a subscription
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:
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.