WH Smith seeking overhaul on rent payment to landlords
WH Smith is reportedly urging its landlords to allow the retailer to delay its rent payments as it looks to improve its cashflow.
According to The Sunday Times, the newsagent chain is set to ask landlords to switch from receiving rent payments in advance – which is the current industry standard – to in arrears. The move is thought to be of consequence as around 300 store leases are coming up for renewal over the next three years.
The newspaper also reported that at a similar time last year, the retailer managed to agree to average rent cuts of around 35% and is already paying in arrears at a handful of its stores.
Last month, the group announced that while its high street business delivered “sustainable profit” and “good cash generation”, total revenue and like-for-like revenue both fell by 5%. It added that gross margin was “ahead of plan”, however, and the group said that it has identified £3m of additional cost savings.
The group plans to open 15 to 20 new UK units this year, and following its “successful” partnership with Well Pharmacy, it also plans to open a new flagship pharmacy format at Heathrow Terminal 2.
It currently has a global store estate of over 600 and is focussing its expansion on its successful travel-arm, following its £305m acquisition of US travel retailer Marshall in December last year.
