Apple asks UK landlords to cut Apple Store rents in half
Apple has made a request to landlords in the United Kingdom to cut the amount of rent it pays by half and to offer a free rental period, a report claims, with Apple supposedly offering to extend its leases for those who take up its offer.
Regent Street Apple Store, London
Apple's physical retail outlets in the UK were shut for a number of months due to the COVID-19 pandemic, with all 32 stores in England only being back in service in the country from June 15. The impact of the coronavirus lockdown and social distancing measures has led to Apple attempting to regain some of its lost retail profits, which it is seemingly doing by reducing one of its main store costs.
According to The Times, Apple has been in contact with a number of landlords it deals with for its 38 retail outlets across the country, requesting some changes to their lease agreements in light of the COVID-19 closures.
The changes are said to include a cut in its rent payments of up to 50%, as well as a period of time where it doesn't have to pay rent to the landlords. In exchange for agreeing to the changes, Apple is preparing to extend the leases it has with the landlords for a few more years.
While seemingly a bold move for Apple, the attempt also has the potential to bring it in line with other retailers who are benefiting from low rents, offered by landlords keen to keep shopping centers fully occupied. Landlords also benefit from Apple beyond paying high rents, as the presence of the Apple Store does help increase foot traffic from consumers in the area, which helps sales for other retailers.
It is believed Apple's offer is being provided to landlords in cases where stores have several years left to run on leases, and that landlords are not obligated to make a decision anytime soon.
The request has caused some friction with land owners, however, as Apple's latest quarterly results revealed an 11-percent revenue jump to $59.7 billion. In July, filings in the United Kingdom revealed Apple earned $1.8 billion in revenue in annual sales, but the company only paid $8 million in tax.
Regent Street Apple Store, London
Apple's physical retail outlets in the UK were shut for a number of months due to the COVID-19 pandemic, with all 32 stores in England only being back in service in the country from June 15. The impact of the coronavirus lockdown and social distancing measures has led to Apple attempting to regain some of its lost retail profits, which it is seemingly doing by reducing one of its main store costs.
According to The Times, Apple has been in contact with a number of landlords it deals with for its 38 retail outlets across the country, requesting some changes to their lease agreements in light of the COVID-19 closures.
The changes are said to include a cut in its rent payments of up to 50%, as well as a period of time where it doesn't have to pay rent to the landlords. In exchange for agreeing to the changes, Apple is preparing to extend the leases it has with the landlords for a few more years.
While seemingly a bold move for Apple, the attempt also has the potential to bring it in line with other retailers who are benefiting from low rents, offered by landlords keen to keep shopping centers fully occupied. Landlords also benefit from Apple beyond paying high rents, as the presence of the Apple Store does help increase foot traffic from consumers in the area, which helps sales for other retailers.
It is believed Apple's offer is being provided to landlords in cases where stores have several years left to run on leases, and that landlords are not obligated to make a decision anytime soon.
The request has caused some friction with land owners, however, as Apple's latest quarterly results revealed an 11-percent revenue jump to $59.7 billion. In July, filings in the United Kingdom revealed Apple earned $1.8 billion in revenue in annual sales, but the company only paid $8 million in tax.
Comments
Apple's morals really seem to be in the gutter lately. This is a case of the big guy bullying the little guy. Several companies didn't take the government's furlough subsidy and paid employees out of their own pockets, but from what I've read Apple took the government subsidy despite being barely affected by the lockdowns. For a company I've supported for 25 years, this kind of thing is a big kick in the teeth and incredibly disappointing to read.
Yet as someone tired of all the virtue signaling Apple has done over the last 10 years or so I say pay up. These building owners and landlords have families and mouths to feed just as you do.
There are business interests on both sides so it will be a game of both sides trying to get the best deal for themselves. Just as it should be.
That's on a business level. At a 'values' level I'm torn. Given the billions they've had sitting around, it might be hard to swallow seeing them ask for a 50% cut in rents (even with the offer of extended lease terms.)
Who says they're all getting cuts? It has only been offered/requested by those who are heading toward bankruptcy generally.
This leaves a very sour taste in the mouth and is enough frankly to put you off Apple and it’s products. It yet again shows it knows no bounds to its endless greed. Apple should be paying 50% more in rent if anything.