Retailers and restaurant groups continue to negotiate with their landlords as they attempt to conserve cash while the coronavirus crisis continues.
Primark
In the interim results for Primark owner Associated British Foods today, chairman Michael McLintock said the “rapid closure of Primark stores has presented a major challenge to the group to manage and mitigate the profit and cash flow impacts arising from the loss of sales”.
The company is “seeking discussions with other counterparties in Primark, in particular landlords, to seek help with our lease payments”, added chief executive George Weston, who noted that the business had gone from £650m in monthly sales to nothing since 22 March.
“Much as I would love to be allowed to reopen Primark stores across the UK, continental Europe and the USA soon, because lockdown has so harmed our business and our supply chains, I know that we must not do so until we have suppressed this disease,” Weston added.
“And when we are allowed to reopen we must make our Primark stores safe for our staff and our customers, even if that means ensuring there are fewer people shopping at any one time and so accepting lower sales at least until the remaining risk is minimal. In time we can rebuild the profits. We can’t replace the people we lose.”
Weston also paid tribute to group employees who had lost their lives to the coronavirus, adding: “I am in awe of the Primark teams for their care, good judgment and immense hard work as they have managed this crisis.”
Comptoir Group
At Comptoir Group, whose Comptoir Libanais restaurants have been closed since 19 March, chairman Richard Kleiner said the company was in a “reasonably healthy cash position with minimal bank debt to service”.
But he added that the group was taking further steps “to protect this position”, including deferring all rent payments due for the March-June quarter to help with cash flow. Kleiner said “negotiations with landlords continue in this area”.
The company is also postponing a new site opening and introducing new cash management measures. Its directors have taken pay cuts and used the government’s furloughing scheme for employees.
Joules
Retailer Joules said in a business update for shareholders that it had been “co-operating with stakeholders, including landlords, to conserve cash through this period of significant global macro-economic uncertainty”.
The company has signed a £15m increase to a credit line with Barclays and has raised a further £15m from an equity fund raising. The company said the combined funding boost and cost cutting had given the company “sufficient liquidity headroom to manage a Covid-19-related downside scenario and the resources to emerge relatively stronger from this unprecedented situation”.
To send feedback, e-mail tim.burke@egi.co.uk or tweet @_tim_burke or @estatesgazette
