Intu Properties has said it is ready to take “robust action” against some of its tenants who have failed to pay rent owed during the coronavirus crisis.
The owner of the Trafford Centre in Manchester and Lakeside in Essex said while it had collected 40% of the rent due by the end of March – up from 29% collected on the due date – some tenants were refusing to enter talks to find a solution to unpaid bills.
UK high street woes
Thousands of high street jobs have been lost in the last 12 months as a result of high profile retail administrations, and thousands more are at risk as Mothercare, Debenhams and Forever 21 prepare for closures. Here are some of the key industry names that have been affected.
Mothercare: Has 79 stores and 2,500 UK retail staff as its British arm prepares to go into administration.
Regis/Supercuts: Had 220 salons and 1,200 staff when it went into administration in October 2019.
Bonmarché: Had 318 stores and 2,887 employees when it went into administration in October 2019. It is still trading as it seeks a buyer.
Watt Brothers: The Scottish department chain had 11 stores and 306 employees when it went into administration in October 2019. All the stores closed and the majority of jobs have gone.
Links of London: With 35 stores and 350 staff, the jewellery chain went into administration on 8 October 2019 but its sites are still trading.
Forever 21: Had three stores and about 290 employees in the UK when it went into administration in September 2019. Stores are staying open in order to clear stock.
Albemarle & Bond: Suddenly shut all its 116 stores in September 2019 with the loss of about 400 jobs, even though it did not call in administrators. It sold its pledge books to rival H&T in the same month.
Karen Millen and Coast: Had 32 stores and 177 concessions, employing 1,100 people, when it went into administration in August 2019. All sites were closed and the vast majority of staff made redundant after the brands were bought out by online specialist Boohoo.com.
Jack Wills: Had about 100 stores and 1,700 staff in the UK when went into administration in August 2019. Bought by Sports Direct and 98 stores are still trading in the UK and Ireland.
Spudulike: Closed all 37 stores with the loss of about 300 jobs when it went into administration in August.
Bathstore: Had 132 stores and 529 staff when it went into administration in June 2019. Homebase bought 44 stores saving 154 jobs and the brand now trades from 28 stores.
Select: Had 180 stores and 2,000 employees when the fashion retailer went into administration in May 2019. In June administrators at advisory firm Quantuma carried out a CVA closing 11 stores with the loss of about 200 jobs.
Debenhams: Had 166 department stores and more than 25,000 employees when went into administration in April 2019. No store closed immediately and the chain is now owned by its lenders but two closed before Christmas with another 20 due to shut in January when the group completes a rescue restructure expected to result in the loss of 1,200 jobs.
Pretty Green: Had 12 stores and about 170 employees when Liam Gallagher’s fashion outlet went into administration in March 2019. All but one store and 33 concessions closed with 100 jobs lost but 67 saved as the brand was bought by JD Sports in April.
Office Outlet: All 94 stores have closed with the loss of 1,170 jobs after the stationery retailer went into administration in March 2019.
LK Bennett: Had 41 stores and 500 employees when it went into administration in March 2019. The brand was bought by its Chinese franchise partner, Rebecca Feng, saving 21 stores, all the group’s concessions and 325 jobs. But more than 100 jobs lost with the closure of 15 stores.
Patisserie Valerie: Had 200 cafes employing nearly 3,000 people when an accounting scandal prompted the chain to call in administrators in January 2019. About 70 of the group’s 200 stores closed immediately with the loss of 900 jobs. About 2,000 jobs were saved when about 100 Patisserie Valerie cafes were rescued by Causeway Capital, more than 20 of which have since closed. 21 Philpotts sandwich shops were bought by AF Blakemore & Son. and four Baker & Spice cafes a were bought by the Department of Coffee & Social Affairs.
Sarah Butler
Intu said: “There are a very small number of cases where customers are not currently engaging with us to find a consensual solution – these are large, well-capitalised brands who have the ability to pay but have chosen not to. In these instances we are prepared to take more robust action to enforce the legally binding terms of those leases.”
It is offering monthly – rather than quarterly – rent payments until the end of the year, has reduced its service charges, and said it was negotiating rent payment plans with some tenants.
The indebted company also used the update to investors to announce it had agreed waivers with some of its lenders to prevent potential breaches as it struggles with plummeting rental income.
Intu warned in late March it would breach the terms on its debt commitments after a collapse in retail rents.
Intu said all of its centres were operating on a “semi-closed basis” with only essential retailers remaining open. It has furloughed about 60% of its shopping centre staff and 20% at its head office.
The company has appointed a chief restructuring officer to help as it “works through its strategy to fix the balance sheet”. David Hargrave was previously a partner in the restructuring practices of the big-four accountancy firms PwC and EY.
Intu has been struggling for some time with its £4.5bn debt pile, and posted a loss of £2bn for 2019. Its share price has crashed by more than 90% over the past 12 months.
Even before the coronavirus crisis began, the company had been hit by a spate of retailers closing stores and restructuring, and had been forced to write down the value of its centres by nearly £2bn.
The company cancelled its emergency cash-call at the start of March, because of “extreme” market conditions as Covid-19 spread across the world. It had planned to raise at least £1.3bn from investors.
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