Apple Asks UK Retail Landlords for 50% Rent Cut Despite Record Sales
Apple has asked landlords of its retail stores in the UK for a 50 percent cut to rent, reports The Sunday Times.
If landlords agree to cut rent by up to 50 percent and offer a "rent-free period" of an undisclosed duration, Apple is supposedly offering a considerable lease extension in return. The proposal is understood to relate to stores with several years left to run on their leases, meaning that landlords are not faced with making an immediate decision.
The tactic has reportedly caused "consternation" among property owners. In spite of all Apple retail locations being forced to shut due to the global situation, Apple reported a record $59.7 billion sales increase in the second quarter of 2020 and said that, while stores where closed, online demand for its products was "phenomenal."
The logic behind the request is based on a desire to bring Apple rent rates into line with other UK retailers, many of which have benefited from lower rents as landlords struggled to keep shopping centers occupied. Apple operates 38 retail locations in the UK, all of which shut in recent months. All UK stores have now reopened.
Apple retail outlets are among the most profitable in the industry and their popularity means that landlords tend to be desperate to keep them as a tenant. Apple declined to comment to the The Sunday Times.
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Top Rated Comments
There's nothing technically wrong with it. But it feels icky.
No doubt fanboys will be along shortly to say how unfair it is to call them out etc, etc.
Apple are tone deaf to the pandemic. They need to look at the optics of how this looks.
Yes, it's perfectly within their rights to do this. But just because they can doesn't mean they should.
Many people on here seem to think of Apple as being some altruistic company, indeed they do try very hard to cultivate that image. However, anyone who has ever had B2B dealings with Apple knows that they are absolutely anything but. Why anyone should cut them some slack when they absolutely would and do not, is beyond me.
Looking forward to seeing how the ADL spin this one against those evil, wealthy landlords.