BPF warns JD Sports on Blacks lease negotiations
By Paul Norman - Friday, January 13, 2012 11:13
The British Property Federation said JD Sports would need to be prepared to “share the pain” with landlords this morning after the retailer said this morning that it planned to renegotiate many of the leases it has taken on as the new owner of Blacks Leisure.
The BPF said landlords will be “happy to sit down and talk, but any pain must be shared”.
JD Sports bought Blacks Leisure earlier this week in a pre-pack administration. The company, whose largest shareholder Pentland owns the outdoor brands Berghaus and Brasher, took on the majority of the 300 Blacks and Millets stores retaining a significant number of Blacks' 3,500 staff.
This warning Peter Cowgill, executive chairman of JD Sports Fashion,warned that landlords need to be "realistic" about lowering rents at Blacks Leisure.
Cowgill said: "When you go into administration you have a clean sheet for renegotiating rents. In some areas, [Blacks] is over-rented on a number of stores. If landlords are more realistic then the future of retailers such as Blacks is more secure."
Liz Peace, chief executive of the British Property Federation, said: “Landlords supported Blacks in a CVA two years ago and will continue to assist businesses in trouble, but mindful of the impact it has on their own pensioner investors.
“JD Sports had the money to buy Blacks, and as JD Sports is a solvent business landlords will have to think hard about any concessions, bearing in mind the impact that would have on Blacks’ competitors and their own investors.
“In securing support for the previous CVA a collaborative approach worked well in ensuring the business survived, albeit temporarily, largely with the help of its landlords, and it would be a pity if that goodwill was repaid with new owners seeking to dictate terms. Any concessions would come at the cost of lower pensioner incomes, who are also struggling in today’s tough climate.”
pnorman@costar.co.uk