A Sir Philip Green-led group of 35 retailers that is demanding monthly rents could be in breach of competition rules.
Adrian Magnus, a competition law specialist at Berwin Leighton Paisner, has warned that the group could be viewed as similar to a price-fixing cartel.
“Retailers need to be careful,” said Magnus. “Under the Competition Act, it is not lawful to have agreements that restrict competition. Retailers compete with each other on costs and rents are a part of that.
“Individual retailers should deal with individual landlords. They cannot get together to agree a price to sell something so, in theory, competitors cannot agree on a price they want to pay to purchase something.”
On 20 August, Green sent a letter to landlords on behalf of 35 retailers, including Jaeger, Jane Norman and New Look, asking for a meeting to “discuss payment of rent, rental issues, service charges and insurance”.
BLP, which advises a number of retail landlords, warned that Green and the British Retail Consortium – which is also calling for monthly rents – had to be mindful of their positions in relation to competition.
“If you are unilaterally saying to people that they should do this, it is not necessarily being anti-competitive,” said Magnus, “but you do have to be careful.”
This week, Lord Harris of Peckham – part of Green’s group – said that his company, Carpetright, would not sign up for another new store in the
The BRC said it was confident that its approach was not anti-competitive as it was merely “encouraging a market transformation”.
Green declined to comment.
Infringements of competition law are punishable by fines of up to 10% of turnover. Directors found guilty can also be disqualified for up to 15 years.
