Troubled fashion retailer Store Twenty One has written to its landlords asking for an immediate cut in rent, warning that without help it faces liquidation.
In a letter, which was sent to landlords from law firm Fladgate, it said without a reduction in rent, parent company Grabal Alok would not be able to fund “the substantial losses” that have hit the value retailer.
The letter warned that if Store Twenty One was put into liquidation, landlords would take on the burden of additional bills such as business rates and service charges, without any entitlement to rent, according to Drapers.
Other options could “result in significant losses to many or all of the landlords and other creditors,” the letter said.
As a result, Store Twenty One is asking for emergency rent relief ranging from half-price rent over the next six months to zero rent until the lease has expired.
The move follows reports last week that landlords had resorted to sending debt collectors in to recover unpaid rent. Earlier this week the business stopped trading online and The Sun reported that a quarter of stores were set to close.
Restructuring firms GA Europe and Hilco are also circling the retailer.
One property insider said: “They are holding guns to the landlords’ heads. There is no guarantee that [the landlords] will get rent after six months.”
He added: “It’s a very innovative move but I think it will go down like a lead balloon.”
Store Twenty One was unavailable for comment.