Foschini owner won t pay rent
TFG, the owner of Foschini, Sportscene, Markhams and @Home stores, says it will not pay rent for its stores at the end of April because of the lockdown. The head of TFG property, Brad Rothenburg, said the group took legal advice before suspending payment.
TFG, the owner of Foschini, Sportscene, Markham and @Home stores, says it will not pay rent for its stores at the end of April because of the coronavirus lockdown.
The head of TFG property, Brad Rothenburg, said the group took legal advice before suspending payment.
“The decision was not taken lightly and has been guided by legal counsel,” Rothenburg said.
“We understand that the lockdown places many sectors and the economy under tremendous pressure. In these extraordinary times we must find ways to navigate the current climate … and ensure business continuity.”
The decision to default comes soon after another clothing retailer, Edcon, announced it was unable to pay suppliers because of reduced shopping activity from mid-March, after President Cyril Ramaphosa urged people to start practising social distancing.
Edcon may not reopen after the lockdown if it does not get sufficient government support.
Clothing retailer Mr Price said it is expecting an increase in unpaid customer accounts and is negotiating with suppliers as it cannot accept and pay for orders that were to be delivered during the lockdown period.
In a statement last week, Mr Price said: “Due to the lockdown, it will be impossible or impracticable for orders already placed for delivery between March 27 and April 16 2020, to be manufactured and/or delivered and received per the terms of the original orders.”
The government is only allowing food and medicines to be sold during the lockdown.
Online retailer Takealot, which is owned by Naspers, told customers it was seeking permission from the government to sell what customers needed.
Takealot stated its view in an e-mail: “Although the current regulations limit us to providing only essential goods at this time, worldwide the picture is quite different and e-commerce companies have largely been allowed to operate as usual while prioritising essential goods. We have engaged with the government to expand the mandate to more than just essential goods.”
Sasfin analyst Alec Abraham speculated that the ban may have come about because it would not have been fair that Pick n Pay could sell stationery yet a stationery retailer was forced to remain shut.
On the ban on retailers selling anything but food, Abraham said: “I’m a little disappointed because I thought it would have been a bit of a boost for the supermarkets because general merchandise products attract higher margins than food.”
Meanwhile, food retailers have done good business as people stockpiled ahead of the lockdown.
Massmart announced a price freeze on goods sold during the lockdown period but excluded fresh fruit and vegetables sold at its Cambridge and Masscash stores.