Stephens Marks, French Connection (“FC”) Chief Executive, has called for the government to lead a review of the law relating to upwards only rent reviews in light of the continued struggle of the FC’s retail business.
Mr Marks blames the rising costs of occupying retail premises, but in particular the provision for upwards only rent review on a 5 yearly basis in many of the 15 year leases FC has entered into, for the financial pressures retailers are experiencing in the current economic climate. 12 of FC’s 74 UK stores were said to have been subject to rent review last year, leading Mr Marks to comment that “one minute a store is profitable, the next it is not”. He believes this is an issue being faced by a considerable number of UK retailers.
The FC group generally, as a global brand, reported a significant rise in profits for the year to 31 January 2011, but UK retail continues to make a loss.