Retailers still carrying rent arrears from last year’s lockdowns

Gap and BB’s among traders embroiled in fresh legal actions with landlords

Among the latest legal disputes is one between clothes retailer Gap and one of its landlords in Cork over debts allegedly owed by the retailer at a premises  at Opera Lane in the city. Photograph: iStock

Among the latest legal disputes is one between clothes retailer Gap and one of its landlords in Cork over debts allegedly owed by the retailer at a premises at Opera Lane in the city. Photograph: iStock

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One in five retailers is still carrying arrears of between 40 and 60 per cent of their total rent for 2020, according to fresh industry research. And one in 12 shops still owes more than 80 per cent of last year’s rent, according to the survey of its members by industry group, Retail Excellence.

The news that large parts of the retail sector are still struggling with arrears racked up under periods of coronavirus shutdowns comes as landlords and retail tenants continue to square off in the High Court over debts accrued during pandemic.

Among the latest legal disputes is one between clothes retailer Gap and one of its landlords in Cork over debts allegedly owed by the retailer at a premises, its biggest store in Ireland, at Opera Lane in the city. New court filings show Gap Stores (Ireland) is being sued by Riga Developments (Cork), which is owned by a consortium of investors who are clients of Deutsche Bank.

The Deutsche investors last August acquired 16 units, including the Gap store, at Opera Lane as part of an estimated €21 million deal. The units were sold by the O’Callaghan Property Group, the developer of Opera Lane founded by late Cork property magnate, Owen O’Callaghan.

That group, now run by the late Mr O’Callaghan’s son, Brian, no longer has any involvement in the scheme.

Legal scraps

Several other high-profile retailers have also become embroiled in fresh legal scraps with landlords in recent weeks. The Irish operation of designer brand Tommy Hilfiger and one of the brand’s European entities are being sued by a pensions manager in the High Court for debts allegedly owed.

Meanwhile, BB’s Coffee & Muffins, the cafe chain that was sold in 2016 by businessman Emmet O’Neill to a consortium led by investor David Raethorne, recently was on the receiving end of a lawsuit from its landlord at the Scotch Hall shopping centre in Drogheda.

Boots, Field’s jewellers, New Look and Schuh are all among retailers to have become embroiled in rental disputes over recent months. Retail industry representatives expect the problem to get worse as a result of the ongoing shutdown, which will be longer than any of the closures in 2020.

Retail Excellence called for independent arbitration to force rent reductions to save jobs.

“Over 57 per cent are anticipating further issues with paying rent during this current lockdown,” said Duncan Graham, its chief executive. “This is simply unsustainable and is putting the largest employment industry in Ireland in crisis.”

Bookseller Eason is also among those facing further legal actions from landlords. It was last month sued by an Irish vehicle controlled by German giant, Deka Immobilien, which is its landlord at Mahon Point shopping centre in Cork and the Whitewater centre near Newbridge. It is already facing similar suits at two of its outlets in Galway.

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