Fashion designer Vivienne Westwood today launched a court fight to avoid a £100,000-a-year rent hike for her flagship store in Mayfair.
Her company, Vivienne Westwood Ltd, is seeking a court declaration that current landlord Conduit Street Development is bound by an implied agreement between the tenant and its predecessor setting a £125,000 pa rent for the five years from November 2014, the date of the first rent review of the store at 44 Conduit St, London W1.
However, the landlord is seeking a ruling that the tenant must pay the market rent of £232,500 pa.
The dispute arises in respect of the 15-year lease granted to Vivienne Westwood Ltd in November 2009, initially by landlord DER Travel Services, together with a side agreement granting the company a personal rate abatement as long as it continued to trade from the property. That side agreement limited the first rent review figure to £125,000 pa.
However, changes in landlord of the premises complicated the arrangement, leading to these proceedings.
The tenant says that, shortly after the first review date, the new landlord, Marisilver Investissement SA, asked it to pay £125,000 pa, which it did. The tenant claims that, in doing so, the landlord was impliedly offering to settle the rent review at that figure, and that it accepted that offer by paying the new rent.
However, the landlord says there was no such implied agreement, and that the £125,000 pa figure was only set pending rent review.
In addition, the parties are at loggerheads over the effect of a late rent payment in June 2015, which Vivienne Westwood Ltd says resulted from two changes of landlord in short order.
The landlord claims that this late payment terminated the side agreement, which means that the rent review can raise the annual rent to the market figure of £232,500.
Vivienne Westwood Ltd says that this sanction is unenforceable as a contractual penalty.
Rising retail rents
Retailers on some of London’s most sought-after streets are being hit by rising rents.
Prime zone A rents in London’s luxury quarter – including Bond Street, Conduit Street, Albemarle Street and Mount Street – have increased by an average of 13.5% pa over the past five years.
The current record rent being paid on Bond Street – £11.5m pa by Polo Ralph Lauren at 1 New Bond Street – represents £2,225 per sq ft.
In addition, business rates are forecast to go up on average from £380 per sq ft to £720 per sq ft zone A this year. The rises are leading to many luxury retailers trying to buy their shops – or other stores nearby – in a bid to avoid high annual costs.
Alan Spencer, director of central London retail at Savills, said: “Retailers with rent reviews now have inevitably been hit hardest. There will always be winners and losers in any property cycle, but we should not forget that the structure that we operate in is one of the major contributors to London’s success.
“While the recent increases in rents are unprecedented, all the economic measures are positive in terms of consumer spend and footfall.
“Most successful retailers are turning over significantly more than they were five years ago and rents have gone up due to the demand to gain representation here.”
Upcoming W1 rent reviews
| Retailer | Address | Landlord | Rent review |
|---|---|---|---|
| Marithe Francois Girbaud | 107 New Bond Street | Private investor | 28 April 2017 |
| Orogold Cosmetics | 37 South Molton Street | City of London | 25 July 2017 |
| Francesco Smalto | 105-106 New Bond Street | Private investor | 22 October 2017 |
| Napket | 6 Brook Street | Great Portland Estates | 11 November 2017 |
| Chanel | 173 New Bond Street | Private investor | 16 December 2017 |
| Jimmy Choo | 7 New Bond Street | Searchmap | 2018 |
| Breitling | 130 New Bond Street | Properties Group & Richemont International | 2018 |
| Van Laack | 160 New Bond Street | Aberdeen Asset Management | 10 February 2019 |
| Amishi | 45 Maddox Street | – | 14 November 2019 |
