Retail rental fears resurface
The forthcoming rent 'quarter day' for many retailers and landlords on 29 September could see more high street companies fall into administration, according to law firm Irwin Mitchell.
Andy Bell, a partner at the Manchester office of Irwin Mitchell, points to the difficulties experienced by landlords and tenants following June's quarter day – when a number of high profile retailers went into administration.
Bell said: "There is often much speculation concerning rent quarter days, but the events of the summer certainly showed what a huge impact they can actually have.
"Retail tenants keen to make the most of the lucrative Christmas market are desperate to ensure problems caused by September's rent payment don't cause their businesses to fail. Clinton Cards' request to the landlords of their 700-plus stores to pay two thirds of their September quarter payment two weeks early and the remaining one third, two weeks late is a good example of a tenant looking to work with a landlord for a deal that could be in the interests of both parties.
"Landlords will be keeping a close eye on developments, particularly in light of what happened with the administration of TJ Hughes.
"Administrators must pay rent as it falls due if they use the premises for the benefit of the creditors. However, in the case of TJ Hughes, which went into administration six days after the June quarter payment date, the administrators have argued that they don't have to pay rent until the September quarter payments fall due.
"The landlords argue that administrators shouldn't be able to avoid liability for rent by timing their appointment just after the quarterly rent falls due. Landlords are bracing themselves for whether anything similar happens in early October."
He added: "In better economic times, quarter days would come and go with little excitement. Now, both landlords and tenants approach these dates with meticulous financial planning as their competitors and funders watch with interest."
