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Fears mount ahead of crux quarter day.

Tension among the region's retailers will intensify this week as firms prepare for quarter day rental payments for the last time before Christmas, according to a business advisory group.

Quarter day - when many retailers pay three months rent in advance to landlords - is often the tipping point for insolvency and previous quarter days have seen the likes of Habitat, Jane Norman and TJ Hughes enter administration. But BDO partner Phil Emmerson expects to see less high street bloodshed on the Autumn quarter day, which lands this September 29.

Mr Emmerson, pictured, 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."

But they are not alone. Landlords are 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 needs is another round of high profile CVAs and 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," he added.

Quarter day is also expected to result in landlords and tenants at loggerheads, as the two clash 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.

He said: "Given the current trading environment and enlarged vacancy rates, negotiations are likely to come to a head.

"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 latest big name retailer to struggle is sports chain JJB and it had been rumoured that advisors KPMG had been trying to push through a sale before quarter day as the firm would not be able to meet payments due this week.

However, these claims were quashed by sources who said that although some stores are on quarterly rent schedules, many pay monthly, so quarter-day obligations will not be fundamental to JJB's future.

JJB hired KPMG last month to handle a sale after suffering dismal trading.

The Alternative Investment Marketlisted retailer's capitalisation fell to below PS1 million this week with restructuring firm GA Europe, JD Sports and Sports Direct, as well as private equity company OpCapita, all understood to be interested in purchasing all or part of the
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Publication:The Birmingham Post (England)
Date:Sep 27, 2012
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