DEADLINE LOOMS FOR SHOP RENT PAYMENTS.
TENSION among Yorkshire retailers is intensifying as firms prepare for quarter day rental payments for the last time before Christmas, it is claimed.
Quarter day - when many retailers pay three months rent in advance to landlords - is often the tipping point for insolvency.
But Graham Newton, partner at business advisory firm BDO, said he expected to see less "bloodshed" on the high street when the autumn quarter day comes on Saturday.
He said: "While some retailers have moved to monthly payments, the quarter day still remains a hurdle for many companies' cash flow.
"Retailers have had another tough and testing year and fourth quarter sales and the January sales are critical for the vast majority.
"They have a hard task in finding ways to encourage people to spend money with them rather than their rivals and this comes down to offering them what they want, new products and value underpinned by superior service."
Mr Newton said landlords were suffering too - and with rising vacancies and a rush of lease expiries imminent over the next two years, they need to keep hold of their tenants. The last thing the sector needed was another round of high profile CVAs or administrations.
"Both tenants and landlords will be keen to make the most of the lucrative run up to Christmas and convert stock into cash, in the hope that even the most cash-strapped of consumers will be hitting the shops," said Mr Newton. Saturday's quarter day is also set to see landlords and tenants at loggerheads over the matter of paying quarterly rates in advance.
The issue of switching to a pay-monthly basis is an ongoing debate, which is still without resolve for many.
"Given the current trading environment and enlarged vacancy rates, negotiations are likely to come to a head," said Mr Newton.
"Retailers will be calling for more flexible arrangements that will not only be in the interest of the high street, but for landlords too who cannot afford to see more retail space on the market."
The comments follow the CBI's latest monthly Distributive Trades Survey, which showed a slight rise in retail sales volumes in the year to September - and hopes among traders that growth will strengthen next month.
| TEST: Graham Newton, partner at BDO in Yorkshire
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|Publication:||Huddersfield Daily Examiner (Huddersfield, England)|
|Date:||Sep 27, 2012|
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