WHSmith joins landlords in renegotiating rent
Along with Next, Sports Direct and River Island, stationery retailer WHSmith is said to be urging its landlords to push back rent payment deadlines as a way of easing the financial pressure on its high-street operations.
The Sunday Times reported WHSmith is seeking to ask landlords to switch from receiving payment in advance to in arrears, after its high-street performance over Christmas saw sales drop 5%.
The retailer’s travel business, with outlets in airports, train stations hospitals and service stations, is outperforming its high-street operation. Last month WHSmith revealed its high-street sales were down 5% in the 20 weeks to January 18, while its travel arm saw revenue rise 19%.
In light of the trading results, chief executive Carl Cowling said: “Our high street strategy continues to deliver through continued gross margin gains and tight cost control.”
WHSmith has around 300 leases coming up for renewal, with only a handful of high-street store rents currently being paid in arrears. On leases that were renewed last year, the retailer secured an average rent cut of 35%. If agreed by landlords, the move to adjust rent agreements on its high-street stores will clearly improve the retailer’s cashflow.