Some of the country’s best-known store chains have joined commercial property owners to appeal to Chancellor Rishi Sunak for state aid with rent. They have written to Mr Sunak warning “many viable companies” will go bust without futher Government intervention, sparking mass job losses and a “devastating impact” which could leave hundreds of shops empty across the UK.
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With little or no turnover from trading, ongoing payment of property costs will imminently become impossible
The letter, from the British Retail Consortium and the British Property Federation, said: “We have come together, as voices of both commercial tenants and landlords, to propose that the government introduces a scheme of rental support for the space that has in effect been furloughed, just as staff have been.”
The two organisations represent companies from Next and Marks and Spencer to British Land and Land Securities.
Their letter warned the survival of retailers “is now being measured in weeks rather than years”.
Retail chiefs fear the British high street will be dead within weeks (Image: GETTY)
It said the “majority of businesses are experiencing dramatic falls in turnover of up to 100 per cent” as a result of lockdown restrictions which call for all non-essential stores to be closed to customers.
The retailers do not believe a three month moratorium against eviction for non-payment of rents proposed by the Government is enough to help them survive.
The letter said: “With little or no turnover from trading, ongoing payment of property costs will imminently become impossible.”
Debenhams faces administrations as a result of the coronavirus crisis (Image: GETTY)
Household names such as Topshop face an uncertain future (Image: GETTY)
Household names such as Top Shop owner Arcadia have turned to restructuring experts or started renegotiating leases.
Others have already been forced into administration, including Debenhams, Laura Ashley, Oasis and Cath Kidston.
Any further collapses will have a serious impact on landlords which will in turn hit UK pension funds, listed companies and private investors.
Police patrol a deserted shopping precinct in Perth, Scotland (Image: GETTY)
Large shopping centre owners such as Intu and Hammerson have reported rents falling by two-thirds as tenants closed their doors.
The retailers and landlors are urging the Government to cover the fixed costs of businesses that have experienced dramatic falls in turnover in a “furloughed space grant scheme”.
The Government has already stepped in to help businesses with a series of measures including grants, business rates holidays and lending schemes that provide government guarantees.
The furlough scheme covering the wages of millions of employees temporarily laid off came into effect today.
But retailers said they were largely unable to take advantage of business interruption loans because lenders are reluctant to lend to shops.
The letter said: “Even full use of these loans will only support their businesses for a matter of weeks or months.”
And there seems little hope of UK lockdown measures being relaxed in the near future.
Boris Johnson is reluctant to ease restrictions amid warnings such a move could spark a second wave of the disease.
The Prime Minister told aides his priority was to help return to a “new normal” once the pandemic has passed its peak.
Coronavirus lockdown (Image: EXPRESS.CO.UK)
But he said he feared lifting restrictions too soon could see a second peak and bring another damaging period of lockdown at a heavy cost to the nation’s health and economy.
A Government source said: “The idea that we will be rushing to lift measures is a non-starter.
“If the transmission rate rises significantly we will have to do a harder lockdown again.”