Apple is pushing for huge rent cuts across its UK stores and the company seeks equal treatment with other retailers, who have had rents cut by landlords struggling to keep their retail real estate occupied during prolonged COVID-19 shutdowns.
Sam Chambers for The Sunday Times:
The tech giant has told landlords of a portion of its 38-store estate in the UK that it wants rents slashed by up to 50% and a rent-free period. In return, it has offered to extend leases by a few years.
The tough tactics have caused consternation among property owners. Despite all its stores being forced to close as the pandemic swept around the world, Apple reported last week that second-quarter sales jumped by 11% to a record $59.7bn (£45.6bn). The iPhone-maker posted a profit of $55.3bn last year.
Apple is seeking to bring its rents into line with other retailers, many of which are benefiting from cut-price deals as landlords struggle to keep their shopping centres occupied. The company’s proposals are understood to relate to stores with several years left to run on their leases, meaning that landlords are not yet obliged to make a decision. Apple declined to comment.
MacDailyNews Take: The fact that Apple has a thriving online sales channel and makes a lot of money does not mean that they should pay double what others are paying for rent, especially since Apple Stores are usually the primary draw for the entire shopping center or retail area. If anything, Apple should be paying less in rent than the other retailers who benefit from the nearby presence of an Apple Store.
As we noted back in 2015: A growing number of malls are actually paying Apple to build a store in theirs.
SEE ALSO:
Apple Retail Stores are saving many shopping malls from death – August 4, 2017
Apple by far the No. 1 retailer in sales per square foot, nearly double those of Tiffany & Co. – July 27, 2017
How the Apple Retail Store took over the world – July 22, 2015
Overall sales at shopping malls with an Apple Store are 10% higher – March 11, 2015
Apple Stores dominate retail with double the sales per sq. ft. of nearest rival, Tiffany & Co. – November 13, 2012
Why authorities waive rents and taxes to land Apple Retail Stores – May 20, 2012
Apple Retail Stores challenge department anchor stores – June 10, 2011
Insane Apple. You still earm billions in net profits so you are not in a position to ask for support or cuts and should not abuse the corona outbreak to squeez more net profits.
If Apple signed a contract to pay a given amount of rent then they are obliged to pay it, no matter the circumstances of the current economy. They have been able to thrive under the miserable conditions brought about by incompetent politicians, unlike so many other businesses. Honor your debts Apple, and STFU.
Tired of stewpidd people who want discounts for any other business affected by coronavirus, but not for Apple.
Wow…what an instructive “moment.” The richest company in the World is asking for economic parity, or “fairness.” It’s reasonable to assume that some tenants that have received a rent exception aren’t as wealthy as Apple…some/most by great margins (stating the obvious). It’s also reasonable to assume the property owner is also not as wealthy as Apple, but Apple is expecting equal treatment. Also, the landlord is expected to take the broad hit with no forbearance from those holding their real estate debt/note.
When a person/entity espouses fairness—which in this day and age almost ALWAYS means the rich should/needs to pay more and then that same voice changes their stance when the table turns on them, a fitting word is: contradiction. A more personal word is hypocrite.
For clarity, I think ID politics is detrimental and full of inevitable contradictions, so I don’t care how wealthy Apple is…they should receive the same leniency of the other tenants. At the same time, this is quite the quandary because expecting the landlord to bear the burden across the board is the greater injustice—regardless of the wealth of the tenant. In the US, the govt has passed law mandating property owners grant forbearance to tenants…which is nothing but equality and fairness thrown out the window. In short, it’s a isolated tax that’s levied on property owners specifically.
When financial equality is the mandate, fairness is ALWAYS sacrificed. When true fairness is present, there will not be financial equity. Socialistic ideas—trying to do the impossible—taking the challenge out of Life and always at someone’s expense. More than ever, this type of thinking is on the ballot this Nov in the US.
Very good points. I would think allowing property owners to charge tenants on a sliding scale would have been more fair.
In one shopping strip you may have a mix of places that had to stay closed longer (gyms, bars,) some that were allowed to open with limited business (restaurants) and some that were deemed essential (grocery, hardware, gas) and may actually have higher profits from more business.
Also you have a mix of Mom and Pops, small local chains, and national or international businesses, plus the added difference of some that can also continue to sell online.
Providing a financial hardship for the overall health of the company, large or small, should have been part of the factoring for rents, just as taxes are (supposed to be) based.
BRING ON THAT STOCK SPLIT! I love seeing people gain wealth!
Biden is NOT stupid, he has dementia. Biden voters are stupid.
Maybe Trump should run for PM of England, since that’s where this story is centered.
Obsessive thinking makes one say strange things…in this case out-of-the/blue irrelevant things.
On the other hand, it amuses you.
+5
Apple is running low on couch change.
Hey Apple most computer companies are cutting prices to compete in this difficult environment. We as Apple customers demand a 50% cut in prices and we will buy more products in the future if you do.