Administrators are braced for high street retailers to collapse this week following landlords’ quarterly rent call. Thousands of jobs are likely to be lost over the coming weeks as store groups struggle to pay their three-monthly rent, which landlords demand in a one-off payment.
Last week Motor World, a 237store chain of car-parts and accessories, fell into administration following a “significant” downturn in retail sales. Home furnishings retailer Rosebys appointed administrators on Friday, while Hardy Amies, dressmaker to the Queen, was on the verge on financial collapse this weekend and its shares were suspended on Friday.
After months of falling sales, many retailers are now finding that they do not have the cashflow to pay their large rental bills this week.
'The cracks are starting to appear. Everybody is feeling the pain,' said the chief executive of a large UK retailer.
The controversial practice of quarterly rental payments has risen to prominence over the past few months. Sir Philip Green and Lord Harris of Peckham, the Arcadia and Carpetright owners, are spearheading a campaign for landlords to allow retailers to pay rents on a monthly basis. Property companies, including some of the UK’s biggest landlords, have held meetings with the group and discussions are continuing.