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