Jigsaw, a mid-market womenswear retailer, is reportedly taking steps to negotiate rent reductions and delay rent payments with its landlords. The company, which operates around 80 standalone stores and concessions in upscale department stores, has sought the assistance of real estate company Colliers International to advise on its property portfolio. Negotiations regarding several of its locations are said to be at an advanced stage, although no official statement has been released by Jigsaw.
This move by Jigsaw reflects the wider struggles faced by the UK fashion retail sector, as retailers of all sizes seek to reduce their rent expenses. Rent and business rates have become increasingly burdensome for the retail industry, particularly in light of declining footfall and the decreasing profitability of physical stores.
Jigsaw’s parent company suffered an operating loss of £9.5 million in the most recent accounting period, ending in September 2018. This marked a significant increase from the £0.5 million deficit in 2017, primarily due to a slight decrease in turnover. These financial results were only made public in June 2019, indicating that it may take some time before more up-to-date figures are available.
It is evident that Jigsaw has been impacted by the challenges faced by the high street, as the company had to seek a rescue deal less than two years ago. Co-founder of Carphone Warehouse, David Ross, injected £20 million into the company in exchange for a majority stake. However, this change in ownership did not bring the stability that Jigsaw needed, as the company has subsequently experienced the departure of two CEOs within a short period of time. Peter Ruis, the longstanding boss, left in March 2018, and his successor Chris Stephenson departed less than six months later in January of the following year. Currently, Jigsaw is without a chief executive and no replacement has been announced.
Overall, Jigsaw’s bid for rent reductions and delayed payments reflects the tough conditions faced by retailers in the UK fashion industry. With declining profits and a volatile leadership situation, the company seeks to ease the financial pressures and secure its place in the market.
For more information on the challenges faced by the UK fashion retail sector, you can visit this article from the Financial Times. To gain insights into the impact of declining footfall on physical stores, you can refer to this article from The Guardian.