Premier Investments warns landlords must 'right size' rents


Premier Investments warns landlords must 'right size' rents
  1. Premier Investments warns landlords must 'right size' rents
    theage.com.au
    Premier Investments says high rents in the apparel sector must come down to reflect the challenges weighing on this retail…
    Health

Premier Investments has foreshadowed more store closures as it warns landlords that the high rents in the apparel sector must come down to reflect the challenges weighing on this retail segment.

The Solomon Lew-controlled retailer owns the highly successful  children's stationery chain Smiggle and Peter Alexander as well as a clutch of mid-market apparel brands, including Jacqui E and Portmans.

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Premier Investments, which owns Portmans, says rents must come down to reflect the challenges weighing on the sector. Premier Investments, which owns Portmans, says rents must come down to reflect the challenges weighing on the sector. Photo: Dean Sewell

Four of Premier's apparel brands reported negative growth in total sales during the first half, and chief executive Mark McInnes said the collapse of  Marcs and David Lawrence had a material impact on the value of some of that rental real estate.

He said the space those fashion brands were vacating was worth "far less than it once was".

"You can assume that we are talking to landlords about making sure they right size their rent in line with market values," Mr McInnes said. "And we are doing that for all our brands."

Premier's online sales grew 48 per cent in the first half and it said  the expansion of this channel had to be balanced with its bricks and mortar network.

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Portmans and Jacqui E attract "exceptional" online sales, according to Premier, and remain "very profitable brands" for the group.

However, Mr McInnes said customers were choosing to buy those brands online, rendering investment in online operations very important.

"Equally we're negotiating hard with landlords to lower their rent to ensure that the profitability at the shop level remains as there's leakage to the online business," Mr McInnes said.

"That's a challenge for the landlords to get used to at lease expiry, significant pressure from our property team to …

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