UK retail executive rails at rent increases

Stephen Marks, the chief executive of French Connection, has warned of the damaging impact on retailers of landlords demanding "upward-only" rent reviews and has asked the Government to look again at the law, as the fashion group posted a sharp uplift in profits despite its UK retail operation continuing to struggle.

French Connection's UK and Europe retail business made a loss of £1.6m for the year to 31 January in a "difficult market", which Mr Marks said had not been helped by upward-only five-year rent reviews on several of its stores that it typically signs for 15-year leases.

He said: "One minute a store is profitable, the next it is not. It [rent up for review] normally goes up by around 20 per cent. I actually think it is something the Government should look at and if you asked every retailer in the country they would say the same." French Connection faced a rent review on 12 of its 74 UK stores last year.

Upward-only rent reviews – which date back to the Landlord and Tenant Act of 1954 and typically apply to leases of five years or longer – are a long-standing gripe of retailers. Landlords also condemn the same legislation for giving tenants the right to renew a lease automatically, when they could easily find a better-performing tenant.  

Source: The Independent