Debenhams, the well-known British department store chain, is seeking a five-month suspension of rent payments from its landlords due to the ongoing coronavirus pandemic. Like many struggling retail businesses, Debenhams is facing an existential threat and hopes that a rent-free period will help improve its chances of recovery. In the past, the company has already requested rent reductions and believes that a rent holiday would benefit both parties involved. For Debenhams, it would provide the opportunity to focus on its recovery efforts, while landlords could potentially convert the company’s debt into equity.
The decision comes as new data on UK footfall indicates a significant decrease in visits to physical stores in recent weeks. According to specialist tracker Springboard, footfall in high streets has experienced a year-on-year decline of 31% on Sunday, while shopping centers saw a drop of 21%. Retail parks, however, experienced a relatively smaller decrease of 6.8%. Interestingly, this resilience can be attributed to supermarkets, which act as anchor tenants in many retail parks. Panic-buying of consumer essentials has led to increased footfall in these areas.
Debenhams, like many other retailers, is navigating through an uncertain and challenging period. Nevertheless, the company remains optimistic about its ability to weather the storm. A spokesperson for Debenhams emphasized their access to funding, supportive investors, and experienced leadership team, all of which will help them manage the situation while continuing to trade as normally as possible. In light of the unprecedented pressures facing the retail industry, companies like Debenhams are proactively taking steps to minimize risks for their employees and customers.
This request for a rent holiday is not the first drastic measure that Debenhams has taken in recent years. The retail chain has already faced significant disruptions, leading to store closures and a strong focus on recovery. As the coronavirus pandemic further exacerbates these challenges, the company is exploring alternative strategies to ensure its survival.
Ultimately, the fate of Debenhams and many other retail businesses will depend on their ability to adapt and navigate the rapidly changing landscape. The current situation calls for innovative solutions and collaboration between retailers and landlords. By providing temporary relief through measures like rent holidays, businesses have a better chance of weathering this storm and emerging stronger on the other side.
1. Debenhams official website
2. BBC article on retail struggles during the pandemic