Traditional leasing models are being turned on their heads as retailers try to adapt to the ever changing landscape.
The latest retailer to do this is WH Smith, who is asking landlords to accept rental payments in arrears, rather than advance, in order to assist with cashflow.
Retailers say that market conditions are forcing them to seek a more "collaborative" relationship with landlords. For example, last year we saw H&M offer landlords "total occupational deals" (where they offered the landlords a fixed amount, often linked to turnover - but it is then up to the landlord to split it between rent/service charge etc as it sees fit).
We will have to see how this latest move will be received by landlords. It will not be popular, but landlords may not have much choice.
WHSmith already pays rent in arrears on several of its high streets stores and secured an average rent cut of 35% on leases renewed last year according to the report. However, due to ongoing tough trading conditions on the high street, the retailer is asking landlords for the switch-up in rent payments to help ease cashflow. The likes of Primark and H&M have demanded lower rents from landlords to fall in line with several struggling competitors’ CVA terms, which include rent cuts to help prevent retailers from going bust.