It will take years to recover, says Republic trade body

RETAILERS in the Republic are seeking significant support from the Irish Government in paying commercial rent ahead of Wednesday when hundreds of millions of euro are due to be paid for quarter two.

In a circular sent to around 200 well-known retailers, Retail Excellence, led by chief executive David Fitzsimons and deputy chief executive Lorraine Higgins (both inset), warned that many shops will take up to three years to recover from the current crisis.

It said a significant proportion of retailers will not be in a position to pay their quarter two 2020 rent bill.

“They are scrambling to negotiate alternation of terms, but ultimately they are simply buying time before the inevitable happens,” said the circular.

This would have a very significant impact on large commercial landlords, which were hit by a decision by Penneys — which trades in the UK as Primark — to suspend rents on its Irish stores during this period.

Retail Excellence is suggesting that the Government pay 60% of rents of closed or distressed retailers for the next three months, landlords pay 20% and tenants 20%. It is understood that such a plan would cost the Irish Government €330m for the three-month period. It is based on an approach being taken in Italy.

The circular said that a number of international retailers are reviewing their continued presence in Ireland and other markets.

It added that support from parent companies has not been granted due to the global nature of the crisis.

Significant legal battles between landlords and tenants over non-payment of commercial rent are being predicted. “And ultimately we will all lose — both tenant and landlord,” it said.

The circular also said that when shops reopen in a few months, the economic outlook will remain bleak.

“Trading revenues will be likefor-like down at best 40-60% for the first six months of trading,” it said.

“For some sectors of Irish retail, it will take three or more years to recover.

“By way of example, visitor-facing retail won’t recover until at best 2023.”

Primark was one of the first major retailers in the UK it announce it was closing its stores, ahead of the UK and Irish governments’ announcements that all non-essential shops should shut.