House of Fraser landlords are facing a challenging decision as new owner Mike Ashley offers them unprecedented deals in a bid to save more stores. Under the proposed ‘meanwhile leases’, some landlords have been approached with a deal to receive no rent at all. However, House of Fraser would still cover business rates and service charges for the units. This move has left landlords questioning their options as they navigate uncertain territory in the ever-changing retail industry.
Reportedly, Ashley’s team has presented landlords with three different options to help save more House of Fraser stores. Thanks to these negotiations, already three stores – Telford, Plymouth, and Oxford Street – have been saved, giving hope to the future of the retailer.
The options offered to landlords include receiving the same rent as pre-administration, rent equivalent to 5% of the store’s turnover, or a rates-only deal. The rates-only deal could potentially help around 28 stores stay afloat, allowing landlords to cover overhead costs that would otherwise be lost if the stores were to remain vacant.
A retail property expert shared their insight with the BBC, stating, “A lot of these landlords will be staring down the barrel. They probably don’t have a plan B so some will think this is quite attractive. They continue to trade, without the burden of business rates which gives them at least a year to come up with a plan.”
While Mike Ashley aims to keep 80% of House of Fraser stores open, negotiations have hit some roadblocks. A House of Fraser spokesperson expressed frustration with landlords who are not willing to collaborate to save the business and hundreds of jobs. Some closures may be inevitable if agreements cannot be reached, putting the fate of numerous stores across the UK in jeopardy.
House of Fraser’s recent rescue from administration by Mike Ashley has brought a mix of hope and uncertainty. As discussions and negotiations continue, the iconic retailer’s future remains uncertain. However, with the dedication of the new owner and some collaborative landlords, there is still a chance to secure the legacy of House of Fraser in the retail industry.
Useful links:
BBC Article: House of Fraser landlords offered unprecedented deal
The Guardian: House of Fraser saved by Sports Direct as landlords approve CVA
