Lifestyle Sports threatens to shut outlets in upward-only rents row
Clothing firm has already negotiated rent reductions for 57 of its 67 stores
Lifestyle Sports has threatened to close up to 10 of its 67 retail outlets over a dispute with a group of landlords but says jobs will be safe.
Lifestyle Sports has threatened to close up to 10 of its 67 retail outlets over a dispute with a group of landlords who will not give it a reduction on upward-only rents.
The company is owned by the Stafford group, which also owns Campus Oil. It has called a creditors meeting to appoint a liquidator to Pombury, an insolvent subsidiary of the Stafford Group that owns the leases on the 10 Lifestyle stores where landlords are holding out on any rent reduction.
Lifestyle has already negotiated rent reductions at 57 of its stores, and those leases have been transferred over to an entity called Lifestyle Sports (Ireland).
The move to wind up Pombury is being viewed as a tough negotiating tactic designed to bring its landlords to heel, or face receiving nothing in a liquidation. The company will now seek to enter negotiations with the landlords on the 10 properties, with a view to reaching agreement before the creditors meeting on February 19th.
It is prepared to shut stores where agreement cannot be reached, however.
The group last night declined to reveal the location of the stores that are under threat.
It said that if any stores do close as a result of Pombury going into liquidation, the staff in those stores would be reassigned to some of its other outlets.
A source rejected the suggestion that if all 10 stores closed, this would leave the remaining stores overstaffed.
It was suggested that the 10 stores where landlords are holding out comprise some of the smaller stores.
The group has about 850 staff.
Pombury remains a defendant in a number of outstanding High Court cases taken against it by some of its landlords over rent disputes.
These include the owners of the Wilton shopping centre in Cork; the Quayside shopping centre in Sligo; the Marshes shopping centre in Dundalk; Liffey Valley in Dublin; and by the owner of a shopping centre in Ashbourne. It has settled other cases against landlords including Tesco.
“Lifestyle Sports has, over the past four years, been fundamentally re-structured putting the business on a solid, sustainable and profitable footing,” said Mark Stafford, the chief executive of Stafford Holdings.
“The voluntary liquidation of Pombury, which is insolvent, is the final step in this restructuring process.
“There will be no implications for Lifestyle employees who will retain their jobs on existing pays and conditions.”
He said suppliers would continue to be paid “as normal”.
“Management in Lifestyle Sports (Ireland) will engage with landlords over the coming days to seek to reach agreement on the re-assignment of the remaining 10 leases,” said Mr Stafford.