Shopping centre group Westfield has closed a large number of retail stores within its centres, including those belonging to the Mosaic Group and to Strandbags, over a rent dispute.
It is believed that 129 of the outlets which have been locked down and denied permission to trade belong to Mosaic and operate under the names Millers, Rockmans, Noni B, Rivers, Katies, Autograph, W. Lane and Crossroads.
Other tenants may face similar action
Luggage retailer Strandbags’ Westfield stores have also been closed over the dispute, and ABC News says other major chains have been given notice by Westfield’s parent company, Scentre Group, to pay rent or face the same consequences.
In common with their counterparts in many parts of the world, shopping centres and retailers in Australia have been in dispute over how much rental, if anything, is payable at a time when retailers have either not been trading at all, or trading poorly due to the pandemic.
Actions are ‘disappointing’, says Mosaic
Many retailers say they have limited cash flow and therefore limited ability to pay, whereas shopping centres argue that that still have fixed costs of their own and cannot be the ones expected to prop up the system.
Some Australian retailers, such as Premier Investments, have simply refused to pay rent during the period, saying wealthy landlords should share the burden of the COVID-19 crisis.
“These actions are extremely disappointing, given the current environment, and difficult to comprehend in the context of a relationship that spans close to 40 years,” said Mosaic Chairman Richard Facioni in a statement.
Conducting negotiations ‘in good faith’
“Mosaic continues to conduct rental negotiations in good faith with all landlords, including Scentre Group, in the spirit of sharing the burden of the impact of the COVID-19 crisis, consistent with government recommendations,” Facioni said.
Strandbags Managing Director, Felicity McGahan, confirmed that their stores in Westfield centres were closed over the dispute.
“We are surprised that they have taken this view, given our category and our focus on luggage [and] travel,” she said.
“Notwithstanding this, we remain hopeful we will reach an agreed resolution.”