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Kingfisher Expected To Call For Move To Monthly Rent Payments

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Sky News has reported that Kingfisher is planning to approach landlords to discuss a move to monthly rent payments.

The current approach required retailers to pay rent in advance, on a quarterly basis.  If landlords support the approach, it would have the benefit of keeping money in the business and ease cashflow as the COVID-19 pandemic continues.   

The next quarterly payments are due next week.

Kingfisher has been forced to close its French and Spanish stores on a temporary basis, leaving the Group at risk of a period of limited income for an extended period of time.  At this stage, no such restrictions have been placed on British retailers. 

It is understood that Kingfisher is not seeking rent reductions.  

Kingfisher spokesman told Sky News: "We are looking to work constructively with our landlords to successfully navigate our way through these extraordinary times."

In recent years, commercial landlords have come under pressure to support the retail chains that operate within their properties, following several high profile cases of CVA arrangements (including Carpetright, Mothercare and Homebase) which allow retail and restaurant chains to negotiate rental payments in order to save their businesses.  

Large landlords such as Intu Properties, which owns several retail shopping centres across the UK, have already warned it is at risk of collapse, with losses having risen to £2bn in the last year.

Chancellor Rishi Sunak recently announced a 12-month business rates holiday as part of a package of financial measures designed to support the economy during the coronavirus crisis. 

The package includes £330bn in loans, £20bn in other aid, a business rates holiday, and grants for retailers and pubs.

In a statement earlier this week, Kingfisher's CEO, Thierry Garnier, said: "While significant uncertainty exists around the impact of COVID-19, we are taking immediate and significant measures to contain our costs and protect our financial position," 

"We have a strong balance sheet, with significant liquidity headroom and limited financial debt."

Source : Insight DIY Team 

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19 March 2020

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