(Adds details on sales, industry context and background)
By Samantha Machado and Patrick Graham
March 24 (Reuters) - Home furnishing retailer Dunelm
on Tuesday was the latest major UK retailer to say it
was launching talks with its landlords on rent reductions, as it
seeks to find a way through a coronavirus crisis that has forced
it to shut all stores.
The chain, which also said it was drawing down all of its
available credit to ride out the pain of the UK-wide shutdown,
joins a growing list of companies who say they are seeking lower
rent or simply will not pay when it comes due.
Burger King boss Alasdair Murdoch, who closed 500 stores on
Tuesday, told the BBC's Today programme he would not be paying
rent this week as he prepares to cover staff wages until
government support begins to flow to the company in late April.
Wagamama owner Restaurant Brands said last week that as part
of its own cutbacks to survive a complete collapse of business
that may last weeks or even months, it was assuming it would be
able to cut rents in half.
Restaurant and pub industry body, UK Hospitality, has warned
that the vast majority of businesses will be due to make advance
quarterly payments of rents totalling billions of pounds on
Wednesday.
The British government, scrambling to deal with the economic
fallout of the crisis, said last week that landlords should not
evict commercial tenants who do not pay their rent due to the
coronavirus outbreak.
Burger King's Murdoch said he thought that move would hold.
"We're not intending to pay our rent tomorrow," he said.
"Most landlords as well have been reasonable about this.
There are a number of creative solutions as well, we could add
three months onto the end of the lease for those people who are
unable to pay ... at the end of these three months."
A halt in payments, however, also raises the question of
whether landlords will default on their own debt commitments.
Even before the government began to shut down British public
life earlier this month, mall owner Intu Properties
was flagging doubts over its ability to continue operations in
the face of a collapse of several retail tenants.
The company did not immediately respond to Reuters emails
about this week's rental payments and whether it was in talks
with existing tenants.
Dunelm, for its part, said it was drawing down 175 million
pounds in available credit, cancelling its interim dividend and
reducing executive pay for the next three months, while
expressing confidence it could ride out the crisis without
breaching its own debt commitments.
The company said its net cash position was 11 million pounds
($12.82 million) at March 21.
($1 = 0.8581 pounds)
(Additional reporting by Tanishaa Nadkar; editing by Amy Caren
Daniel, Bernard Orr)
Dunelm (DNLM)
