Fashion retailer H&M is battling with landlords over rent reductions, which could potentially see property owners bear the cost of the rising number of returned clothes.
According to a report from The Times, the retailer is pushing for “total occupational deals” where it discusses with landlords a sum linked to the amount of sales at the store and divides it between service charge, rent and business rates.
The deals have also seen H&M “insist” on any returns that come into a store, including from purchases made online, to be deducted from that shop’s revenues, potentially decreasing rates.
The demands have already been deemed “too aggressive”, with some landlords reportedly rejecting the offers.
Over the last decade, the brand has added the fashion brands Cos, Monki, Cheap Monday, & Other Stories and Arket to its group. It is the world’s second-biggest fashion retailer, and has 4,739 shops in over 62 countries with 304 in the UK.
This comes after the retailer reported an 11% increase in its Q2 results, the fifth straight quarter of consistent sales growth for the company.
A spokesperson from H&M said: “Like every retail business, we work with our landlords to draw up lease agreements that allow us to run a successful store portfolio. We won’t discuss the details of individual contracts as we consider this information to be commercially sensitive.”