Mainstream and luxury retailers like Hugo Boss, Burberry, Mulberry and Nordstrom are pushing their landlords for flexibility as sales decline. British luxury firm Burberry has been working with landlords on rental relief in its Asian store network. Hugo Boss is seeking ‘selective and temporary’ rental relief in difficult markets, while Nordstrom plans to lower rent payments until the beginning of next year.
Mid-market brands like H&M and New Look have requested landowners to link their lease payments to turnover in the future. Confindustria Moda, the body representing the Italian fashion industry, called for a pause on rental payments when stores across the country were all closed in March. Thierry Andretta, Chief Executive Officer, Mulberry has urged the British government to review rents and business rates, a form of tax on property you occupy, to protect jobs and give brands time to recover. Andretta has drawn the government’s attention specifically to London's Bond and Regent Streets which are considered some of the most expensive streets in the world. Such high rent cost forces luxury brands to increase prices in turn hurting the likelihood of tourists choosing London as a shopping destination over Milan or Paris.
The greater impact instead might be on future store openings. Brandon Famous, Executive Managing Director-Retail, CRBE says brands may avoid opening points of sale in Western cities where they do not already have a presence. They may instead more four more stores in China.
