Ann Summers threatens landlords over store rents

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Ann Summers

Retailer Ann Summers has warned owners of its stores that they need to take a “more pragmatic approach” in rent negotiations.

The lingerie and sex toy chain said if that didn’t happen, it would ask to formally restructure its debts through a corporate voluntary agreement (CVA).

General manager Jacqueline Gold said owners need to recognize that the retail landscape has changed.

Writing in Retail Week, Ms Gold said the ultimatum was “not an idle threat”.

She said many landlords have been open to renegotiating rental costs, but others continue “to stick their heads in the sand.”

“I am grateful to those owners who have engaged in constructive discussions with us, and if we do a CVA they certainly will not be compromised. For those who have not yet done so, there is still time to come to the table.

“It’s a shame that we have to threaten a CVA to do this, but it’s not an empty threat. ”

Ann Summers benefited from a boom in online orders during the lockdown. As a result, the company says it expects this year’s results to show a significant improvement over last year. But its physical stores have been forced to temporarily close.

Many retailers fear that store sales may slowly recover given the continuing impact of the pandemic, making it difficult to pay rents and commercial rates. Ms Gold said a CVA was the only way to fix the problem.

A CVA is an insolvency procedure that allows a company to agree with its creditors on the payment of all or part of its debts.

“All of us retailers recognize that the way customers shop will not just go back to what it was before the pandemic,” Ms. Gold wrote.

“That’s why, like many retailers, we believe sales-based rents are the way to go. “

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Legend

Jacqueline Gold said some homeowners were hanging on to outdated terms


Ms. Gold said she was optimistic about the future after reforms within the company and changes in product quality and price positioning.

She described 2019 as “the toughest year” in company history, resulting in a loss of £ 16million last year.

“My family has invested significant amounts of money in the business to help us resolve the issues that held us back last year and put Ann Summers back on a level playing field, with plans to invest more.” , wrote Ms. Gold.

“But there’s no point just subsidizing those homeowners who continue to hang on to outdated terms. “

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