Frasers Group to stop rent payments until it can ‘freely trade’
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Mike Ashley’s Frasers Group has reportedly told landlords that it will withhold rent payments until it is “fully able to freely trade as a business”.
According to a letter seen by Estates Gazette, the Sports Direct owner said although it is willing to enter negotiations with landlords but said that it will not be making payments until trade “reaches a level which the parties would have envisaged when they drew up the lease.”
The proposal, which would affect all of the group’s stores including Sports Direct, House of Fraser, Evan Cycles and Game among others, also reportedly asks landlords to move all rent payments moving forward onto a monthly cycle.
“A tenancy of a property which could not be used for trading was not the deal we made as tenant…the whole purpose was for us to be able to trade,” the letter reportedly states.
Earlier this year the group issued a profit warning after revealing its board expects Covid-19 to cause a “significant disruption” to its business.
The retailer said the impact, including customer footfall, will likely mean the group “will not achieve” its previous guidance of 5-15% EBITDA growth for the year ending 26 April 2020.
It also revealed it would no longer give official guidance on its 2020 financial year.
