Jack Wills stores at risk as Sports Direct kicks off landlord negotiations
Sports Direct has begun to negotiate with landlords over rent cuts at Jack Wills stores, which could see some branches marked for closure by the end of this week.
Mike Ashley’s company is seeking to slash rents at poor performing branches after acquiring the retailer earlier this week.
Stores will be shuttered if a new deal is not reached. City PM understands the first round of negotiations could be completed by the end of this week.
Read more: Mike Ashley’s Sports Direct buys Jack Wills for £12m
Real estate services firm CBRE is advising Sports Direct on the Jack Wills property portfolio.
James Keany, CBRE head of national agency, said: “We continue to advise on property related matters across the Sports Direct portfolio and are pleased to have been appointed on this latest property mandate for Jack Wills, which is one of Britain’s most recognised fashion brands.”
Michael Murray, Sports Direct head of elevation and Ashley’s future son-in-law, yesterday said the company was aiming to cut “extortionate” rents.
“For the foreseeable future we will try and keep as many stores as possible, but the business has historically chased retail direct-to-consumer sales and has over-extended itself into multiple locations paying extortionate rents,” he told Sky News.
Read more: Sports Direct closes in on Jack Wills deal
Last year the retail tycoon blamed “greedy” landlords for the closure of three House of Fraser branches after he bought the struggling department store out of administration.
“Based on past experience, like House of Fraser, he has entered into very fractious relationships with landlords, saying ‘if you don’t reduce the rents we will look to close in your mall,” said Harper Dennis Hobbs head of retail consultancy Jonathon De Mello.
In Sports Direct’s latest full-year results the company described the problems at House of Fraser as “terminal”.