Property Week reported on January 24 that Smiggle has been in talks with landlords about reducing the rent it pays across some of the stores where trading has been poor.
A source close to the retailer told Property Week: “The reaction has been a bit mixed. Some landlords have been brutal in their stance, saying ‘you agreed these rents; now you need to pay them’, while others have opened a dialogue with them and are trying to work out a solution.”
Property Week’s source added that it was a ‘mixed bag’ of stores that were struggling, and that those affected were not necessarily the ones with the highest rents.
The Australian brand Smiggle has been opening stores left, right and centre in the UK since 2014, including a shiny new two-storey flagship on London’s Oxford Street last year. Smiggle now has around 130 stores. The brand continues to record strong sales and profits in its UK marketplace, but has shown it is keeping a close eye on costs and profitability with this recent move to attempt to reduce rents.
According to its most recent accounts filed at Companies House, Smiggle recorded a 92% increase in revenues to £55.7m in the year to July 2017. Pre-tax profit rose from £3.8m to £10.8m, which Smiggle group managing director John Cheston said was driven by online sales. It has yet to file accounts for 2018.