WH Smith calls on landlords to overhaul rent payment
WH Smith is said to be urging its landlords to push back rent payment deadlines as the retailer looks to cash in on high street troubles.
The stationery chain is set to push landlords to switch from receiving payment in advance to receiving it in arrears, the Sunday Times reported.
The move, which would come into effect when the firm’s leases come up for renewal, would help to ease the retailer’s cashflow.
It comes amid a shift in power away from landlords amid torrid trading on the high street, with a wave of shop closures allowing more resilient retailers to push for more favourable terms.
A spate of company voluntary arrangements (CVA) — a rescue plan that allows rents to be slashed — has led chains such as Primark and H&M to demand lower rent in line with their struggling rivals.
On leases that were renewed last year, WH Smith secured an average rent cut of 35 per cent, according to the report. The firm is already paying in arrears on a handful of its high street stores.
WH Smith, which is the world’s oldest retail chain, has roughly 300 leases up for renewal in the next three years.
The firm has proved resilient to a wider downturn for brick and mortar retailers, and has been boosted by strong trading in its travel business — its outlets in stations, airports, hospitals and service stations.
The chain now has 600 stores across the globe, with its overseas presence bolstered by the £305m acquisition of US travel retailer Marshall in December.
However, WH Smith has come under fire over new chief executive Carl Cowling’s pension packet, which is worth 12.5 per cent of his £525,000 salary. Cowling is also entitled to a bonus of up to 160 per cent.