Focus takes a rent holiday
Published: 10 February, 2010
CREWE: Focus DIY has asked its landlords for an extra week to pay its rent for January and February.
The company, run by Bill Grimsey, the turnaround specialist who led Wickes in the mid-1990s, is exercising a clause in its company voluntary arrangement giving it up to a week's leeway in paying landlords.
Under the agreement, which creditors voted in favour of last summer, Focus was able to dump 38 closed stores, while remaining landlords made concessions.
Focus's request for a rent holiday suggests that cashflow is still tight at the chain, even after eliminating the cash drain from its closed stores. The measure, despite being approved by the majority of creditors, enraged some landlords arguing that they were being sacrificed to save further losses by Cerberus, the American private equity group that bought Focus for £1 in 2007.
Focus's rivals, primarily Kingfisher, which owns B&Q also objected with Ian Cheshire, Kingfisher's chief executive, writting to landlords asking for the same terms as Focus.
The impact of the snowfall on takings is revealed by poor retail sales figures for January, released by the British Retail Consortium. Homeware retailers were hit worst, according to accountancy firm BDO. Sales at homewares retailers, which are most dependent on car drivers, plunged by 8.2 per cent last month, according to BDO's High Street Sales Tracker.
Kingfisher, the market leader, updates the market on its January performance next week. Retailers of "big-ticket" items, such as Carpetright, said trading during January was poor as customers brought forward purchases to December to avoid January's VAT rise. Snow also deterred shoppers in January.