At the end of last month, retail centre giant Intu announced that they had gone into administration. The news followed an earlier statement from the firm that it had failed to reach a financial restructuring agreement during talks with lenders. Intu, which has 17 shopping centres in the UK including the Trafford Centre, had been struggling with debts worth £4.6bn before the coronavirus pandemic.
The lockdown has exacerbated the problems, as consumers are ordering more goods than ever online. There has been a huge drop in the number of visitors to large shopping centres, and companies with large retail spaces are particularly hard-hit. Landlords are offering more flexible and shorter leases, in an effort to stem the tide of closers – but a lot of their tenants are really struggling with their falling cashflow.
Immense pressure on retail landlords
The fall of one of the biggest shopping centre giants has highlighted the drastic situation that retail landlords are facing. Thanks to the huge slump in rental income due to coronavirus, landlords collected only 18% of commercial rents for the last 3 months up until June 24th, according to Property Week.
Intu has nearly 3,000 employees and supports around 130,000 jobs, which will now be at risk. Due to the firm’s complex corporate structure, its shopping centres will remain trading, as many are technically owned by various banks and lenders. Consumers are not likely to notice a difference straight away, however the less-popular Intu outlets are likely to prove more difficult to sell through administration.
We are specialists in helping retailers
The ongoing pandemic is exacerbating the issues already faced by the sector, leading to more and more insolvencies in the retail industry.
If your business is now facing cash flow concerns and you’re worried about the uncertain future, give us a call for our specialist advice.
Clarke Bell have more than 28 years’ experience in helping retailers to deal with their cash flow and debt problems, and to have a fresh start.