Rents pressure forces retail closures

Growing numbers of high street retailers are at loggerheads with the landlords of their shops, threatening to abandon hundreds of stores when leases end in the coming years unless hefty rental discounts are granted. Mothercare has announced closure of 110 stores, music retailer HMV announced in January it would cut 60 stores from its UK network, while electrical retailers Comet and Dixons
have also signalled their intention to cut outlets; Comet said last week it would close 10 stores while Dixons is said to want to cut its UK store numbers from 600 to 450.

Increasingly tough trading conditions as consumers trim back their spending have resulted in a spate of profit warnings in the retail sector. Under pressure to cut costs, retailers including Sir Philip Green have publicly decried the inflexible nature of UK property leases, which ensure retailers are stuck paying top-of-the-market prices, even though rents have halved in some areas in the past three years.

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