Mike Ashley’s Frasers plans to withhold rents indefinitely
Sports Direct owner Frasers Group has told landlords that it intends not to pay rents until trading “reaches a level” that parties would have “envisaged” when its lease agreements were drawn up.
According to a letter seen by EG, dated 6 July, the retail group is “willing” to enter further discussions with landlords on its proposal. However, it told landlords that it will not make any rental payments until the group is “fully able to freely trade as a business” at affected locations.
The letter states: “We write to confirm that we shall not be making any rental payment in respect of the property that we occupy until we are fully able to freely trade as a business at this location and the level of trade reaches a level which the parties would have envisaged when they drew up the lease.”
Sports Direct owner Frasers Group has told landlords that it intends not to pay rents until trading “reaches a level” that parties would have “envisaged” when its lease agreements were drawn up.
According to a letter seen by EG, dated 6 July, the retail group is “willing” to enter further discussions with landlords on its proposal. However, it told landlords that it will not make any rental payments until the group is “fully able to freely trade as a business” at affected locations.
The letter states: “We write to confirm that we shall not be making any rental payment in respect of the property that we occupy until we are fully able to freely trade as a business at this location and the level of trade reaches a level which the parties would have envisaged when they drew up the lease.”
The retail group is also asking landlords to move all rents in future onto monthly payment cycles, to aid cashflow.
Frasers previously approached landlords in March requesting temporary 50% waivers on its rents. It said these would still apply for the March and September quarterly dates.
Its proposals apply to all of its fascias, which include Sports Direct, USC, Flannels, House of Fraser, Evans Cycles, Game, Sofa.com and Jack Wills.
Frasers said that since its locations have been unable to trade under lockdown restrictions, it imagined that parties would have made the “obvious provision” of suspending its obligations to pay rent until it is “once again able to use, occupy and enjoy the property, in full”.
“A tenancy of a property which could not be used for trading was not the deal we made as tenant,” states the letter. “The whole purpose was for us to be able to trade.”
Frasers has not responded to requests for comment.
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