Apple asks UK landlords to cut Apple Store rents in half

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Comments

  • Reply 21 of 46
    PezaPeza Posts: 197member
    elijahg said:
    tundraboy said:
    razorpit said:
    Torn on this one. As a share holder I say right one Apple. Pressure them to the lowest point you can get them.

    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.
    These building owners and landlords are far more well off than me or you.  Most of them are mega corporations in their own right.  Your sympathies are misplaced.  As far as I know, Apple hasn't lain off or reduced the pay of any retail employees even through store shut downs.
    Not all of them. Intu who owns several malls across the UK is about to go bust. And no it hasn't, that's not much kudos since the government is paying for those furloughed workers and Apple is taking those subsidies from the government rather than out of its own pocket like some other profitable businesses - who actually have morals.
    Are you telling us Apple is taking UK government subsidies to pay for furloughed workers?
    Probably yes, any business big or small can claim for money from the U.K. government to pay for furloughed staff. So I’d imagine Apple are doing the same, let’s not forget that’s the public’s money which Apple doesn’t really contribute to with its poultry less then 8 million taxes it paid.
    elijahg
  • Reply 22 of 46
    PezaPeza Posts: 197member

    elijahg said:
    Rent is being cut for companies that are struggling and likely to go under without a cut, clothing stores, grocery stores etc. Apple isn't going to go under: they just reported record revenue while a lot of high street names are making heavy losses (and still paying more than Apple in tax). Even some malls are financially struggling, there's no way they can afford a 50% cut.

    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.
    It does seem under Cook they are utterly obsessed with that share price, nothing else matters, certainly not morales. But then of course the higher the share price the more personal wealth the board makes, on top of their fat pay cheques. They will ultimately lose these anti competitive cases and hopefully that will bring them down a peg or two.
    elijahg
  • Reply 23 of 46
    mcdavemcdave Posts: 1,826member
    elijahg said:
    Apple's morals really seem to be in the gutter lately. This is a case of the big guy bullying the little guy.
    I was nodding, until I remembered the article was about landlords. Perhaps Apple is tuning its tactics to the audience.  Or perhaps the initial negotiations should have been easier.
    edited August 2020
  • Reply 24 of 46
    mcdavemcdave Posts: 1,826member
    “earned $1.8 billion in revenue” - earnings and revenues are not the same. They are taxed on the former, not the latter. Post their UK earnings (net profits), then we can judge.
    edited August 2020 watto_cobra
  • Reply 25 of 46
    SpamSandwichSpamSandwich Posts: 33,408member
    elijahg said:
    lkrupp said:
    elijahg said:
    Rent is being cut for companies that are struggling and likely to go under without a cut, clothing stores, grocery stores etc. Apple isn't going to go under: they just reported record revenue while a lot of high street names are making heavy losses (and still paying more than Apple in tax). Even some malls are financially struggling, there's no way they can afford a 50% cut.

    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.
    Such twaddle. Business is business. If you can get concessions from your suppliers (or landlords) that’s what you do. And Apple’s landlords are fabulously wealthy already, no need to worry about them or Apple’s “morals”. Apple is offering to extend leases in return for lower rent. Sounds like a win-win to me.
    Not as fabulously wealthy as Apple. But as evidenced by every last one of your posts, you couldn't care less about morals, your own or Apple's.
    Get real. Apple is a business and the properties where they have stores are also owned by businesses.
    watto_cobra
  • Reply 26 of 46
    djfriardjfriar Posts: 26member
    If Apple’s profits went up while the stores were closed, then that would tell me that the stores aren’t really required for Apple to move its product. I wonder if that is part of the motive behind this. From Apple’s POV, they may not need as many stores as they have as online ordering is far more accepted now; so they are asking for rent cuts and in exchange they will agree to keep their store presence. So in that scenario, if the stores are as important, they would want to lower their cost, which can be done by letting the leases expire, or by lowering their costs so that keeping them around doesn’t cost as much.

     If that is the motive behind this, it seems less greedy then just “if they are getting a discount, why don’t we get one?”
    watto_cobra
  • Reply 27 of 46
    citpekscitpeks Posts: 178member
    lkrupp said:
    elijahg said:
    lkrupp said:
    elijahg said:
    Rent is being cut for companies that are struggling and likely to go under without a cut, clothing stores, grocery stores etc. Apple isn't going to go under: they just reported record revenue while a lot of high street names are making heavy losses (and still paying more than Apple in tax). Even some malls are financially struggling, there's no way they can afford a 50% cut.

    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.
    Such twaddle. Business is business. If you can get concessions from your suppliers (or landlords) that’s what you do. And Apple’s landlords are fabulously wealthy already, no need to worry about them or Apple’s “morals”. Apple is offering to extend leases in return for lower rent. Sounds like a win-win to me.
    Not as fabulously wealthy as Apple. But as evidenced by every last one of your posts, you couldn't care less about morals, your own or Apple’s.
    You would last about five minutes as a business owner before going bankrupt. There is nothing even close to immoral about Apple trying to get a better deal from its landlords. As a landlord I would jump at the prospect of locking in a deal that would keep a tenant in my building for an extended lease and not have to worry about where my next tenant is going to come from. And you can take your moral judgement and shove it where the sun don’t shine. And I’m betting you are a hypocrite in that you will continue to buy and use Apple products even as you condemn them for their moral turpitude. What a jackass.

    The problem is that most people are seeing this from the standpoint of being residential lessees, where negotiations, re-, or otherwise, aren't common, and leases are more strictly adhered to, in a "off-the-shelf" or ready-made sense, and equal-opportunity rules, non-discrimination, and other tenant protection measures apply.

    That's not the case in commercial real estate, where the two parties aren't bound by as many rules, and they are purely business deals in a more liberal setting.

    Apple is far from the only tenant seeking to renegotiate its leases, and while the terms may seem onerous at first glance, they are only the opening proposals as a prelude to further negotiations, where compromises from both sides results in new agreements that satisfy both parties.  If Apple's landlords are satisfied by a lower, but more stable cap rate, then there's nothing wrong with what the company is asking for.

    To name another example, the commercial real estate market in Hong Kong has been severely impacted by continued instability, first political, and now both political and health related.  The market has been upended, and has seen both rent concessions offered by landlords, and well as shuttered outlets from retailers sharply curtailing their footprints, including the big, well-known luxury brands who are Apple's peers.  That includes some of the most valuable real estate in the world, and the only outcry stems from the lamentable situation, not the actions being taken in reaction to it.  That's part of the business and the landlords understand that.

    Apple is not a person, and neither are the big landlords.  Both are businesses, with the fiduciary duty to maximize their earnings to the benefit of shareholders and owners, and these are business arrangements, subject to market conditions.

    That the company just posted record quarterly revenues is not a factor that enters into such negotiations, any more than the income of an individual lessee factors into a rental price.  Or would people really rather have their landlords charge different rents to different tenants keyed to their income?  Aside from being illegal, it's probably not something many would desire, so should the same principle be applied to this situation?

    In short, it's business.
    watto_cobrarandominternetperson
  • Reply 28 of 46
    sflocalsflocal Posts: 5,816member
    This attitude ("if you can get concessions...that's what you do") is still a moral choice. Business does not exist in a vacuum.
    Cry me a river.  This kind of crap is exactly the same whining that goes on when people demand Apple pay more in taxes for “moral and ethical” reasons when not legally required to do so.  

    Those landlords that have made so much money in rent from Apple over the years that they too should be expected to tighten their belts too when everyone else is expected to.  I doubt they’re in the same league as small mom-and-pop businesses.  
    watto_cobramacplusplus
  • Reply 29 of 46
    That’s an arrogant, cocky request for a two trillion dollar company with huge profits.

    As if landlords have no costs! They are suffering more than Apple.

    For ordinary working people I’d understand the request. Not Apple.
    Pezaelijahg
  • Reply 30 of 46
    sflocal said:
    This attitude ("if you can get concessions...that's what you do") is still a moral choice. Business does not exist in a vacuum.
    Cry me a river.  This kind of crap is exactly the same whining that goes on when people demand Apple pay more in taxes for “moral and ethical” reasons when not legally required to do so.  

    Those landlords that have made so much money in rent from Apple over the years that they too should be expected to tighten their belts too when everyone else is expected to.  I doubt they’re in the same league as small mom-and-pop businesses.  
    Not whining. You'll note I didn't offer an opinion on whether Apple have done the 'right' or 'wrong' thing. I'm simply pointing out that they HAVE made a moral decision to pursue this approach. Just because a decision is a 'good business decision' does not preclude it from having moral worth.

    And you're right: the same applies when deciding what tax loopholes to use. I wish people defending these practices would have the guts to accept that they ARE moral decisions, and defend them on those grounds.
    crowleyPezaelijahgmuthuk_vanalingamavon b7FileMakerFeller
  • Reply 31 of 46
    crowleycrowley Posts: 9,082member
    sflocal said:
    This attitude ("if you can get concessions...that's what you do") is still a moral choice. Business does not exist in a vacuum.
    Cry me a river.  This kind of crap is exactly the same whining that goes on when people demand Apple pay more in taxes for “moral and ethical” reasons when not legally required to do so.  

    Those landlords that have made so much money in rent from Apple over the years that they too should be expected to tighten their belts too when everyone else is expected to.  I doubt they’re in the same league as small mom-and-pop businesses.  
    Not whining. You'll note I didn't offer an opinion on whether Apple have done the 'right' or 'wrong' thing. I'm simply pointing out that they HAVE made a moral decision to pursue this approach. Just because a decision is a 'good business decision' does not preclude it from having moral worth.

    And you're right: the same applies when deciding what tax loopholes to use. I wish people defending these practices would have the guts to accept that they ARE moral decisions, and defend them on those grounds.
    Good post.  Businesses do not exist in a moral vacuum and "business is business" when it's advocating or excusing an amoral attitude is a pretty gutless stance .
    thelemmingfacePezaelijahgmuthuk_vanalingamavon b7FileMakerFeller
  • Reply 32 of 46
    Trillion $ company, come on Apple!! You are taking the p!ss. 
    1/2 price rent reductions, only if I can have an iPhone 11 Max Pro @ 1/2 price? 
    Peza
  • Reply 33 of 46
    GeorgeBMacGeorgeBMac Posts: 10,682member
    lkrupp said:
    elijahg said:
    Rent is being cut for companies that are struggling and likely to go under without a cut, clothing stores, grocery stores etc. Apple isn't going to go under: they just reported record revenue while a lot of high street names are making heavy losses (and still paying more than Apple in tax). Even some malls are financially struggling, there's no way they can afford a 50% cut.

    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.
    Such twaddle. Business is business. If you can get concessions from your suppliers (or landlords) that’s what you do. And Apple’s landlords are fabulously wealthy already, no need to worry about them or Apple’s “morals”. Apple is offering to extend leases in return for lower rent. Sounds like a win-win to me.
    Translation:   "It's dog eat dog, survival of the fittest!"
    It always surprises me how those with no morals, ethics or values can rationalize depraved corruption.

    They think the world is comprised solely of sharks and treat it that way -- but then have to make up excuses to justify their actions when challenged with the reality that people, governments and corporations who survive long term typically operate from a set of values and morals that guide their actions.

    Sorry, but extortion is still extortion and it is still wrong no matter who does it.
    elijahg
  • Reply 34 of 46
    PezaPeza Posts: 197member
    djfriar said:
    If Apple’s profits went up while the stores were closed, then that would tell me that the stores aren’t really required for Apple to move its product. I wonder if that is part of the motive behind this. From Apple’s POV, they may not need as many stores as they have as online ordering is far more accepted now; so they are asking for rent cuts and in exchange they will agree to keep their store presence. So in that scenario, if the stores are as important, they would want to lower their cost, which can be done by letting the leases expire, or by lowering their costs so that keeping them around doesn’t cost as much.

     If that is the motive behind this, it seems less greedy then just “if they are getting a discount, why don’t we get one?”
    Then they would have to move to an entirely online and phone based support structure, the stores are not just about selling goods, they also have the Genius bars and full product support. 
    GeorgeBMac
  • Reply 35 of 46
    lkrupplkrupp Posts: 9,627member
    lkrupp said:
    elijahg said:
    Rent is being cut for companies that are struggling and likely to go under without a cut, clothing stores, grocery stores etc. Apple isn't going to go under: they just reported record revenue while a lot of high street names are making heavy losses (and still paying more than Apple in tax). Even some malls are financially struggling, there's no way they can afford a 50% cut.

    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.
    Such twaddle. Business is business. If you can get concessions from your suppliers (or landlords) that’s what you do. And Apple’s landlords are fabulously wealthy already, no need to worry about them or Apple’s “morals”. Apple is offering to extend leases in return for lower rent. Sounds like a win-win to me.
    Translation:   "It's dog eat dog, survival of the fittest!"
    It always surprises me how those with no morals, ethics or values can rationalize depraved corruption.

    They think the world is comprised solely of sharks and treat it that way -- but then have to make up excuses to justify their actions when challenged with the reality that people, governments and corporations who survive long term typically operate from a set of values and morals that guide their actions.

    Sorry, but extortion is still extortion and it is still wrong no matter who does it.
    And what, exactly, is Apple extorting? The landlords can refuse the request can they not? Apple can stay or leave when their lease is up can they not? The landlords can find new tenants can they not? Apple stores are in prime retail spaces and the properties they lease are in great demand. Apple has spent millions of dollars renovating these properties to make the areas attractive. Other tenants in the area benefit from the cachet of Apple’s presence with more foot traffic and sales. 

    But there is no discussion with a closed, socialist mind like yours who sees things only in the black or white light of undefined “fairness”. And you accuse conservatives of being closed minded? Yet earlier you admitted profiting  from the very evilness you constantly decry to buy a new car. Doesn’t that bring your own morals into question? Instead of buying a car should you not have donated that profit to one of your socialist causes? 
    randominternetperson
  • Reply 36 of 46
    iOS_Guy80iOS_Guy80 Posts: 551member
    lkrupp said:
    elijahg said:
    Rent is being cut for companies that are struggling and likely to go under without a cut, clothing stores, grocery stores etc. Apple isn't going to go under: they just reported record revenue while a lot of high street names are making heavy losses (and still paying more than Apple in tax). Even some malls are financially struggling, there's no way they can afford a 50% cut.

    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.
    Such twaddle. Business is business. If you can get concessions from your suppliers (or landlords) that’s what you do. And Apple’s landlords are fabulously wealthy already, no need to worry about them or Apple’s “morals”. Apple is offering to extend leases in return for lower rent. Sounds like a win-win to me.
    👍
  • Reply 37 of 46
    Suppose Apple had a long-term contract with a company who supplies gas (petrol) to their (hypothetical) fleet of cars/shuttles for employees.  When the contract was negotiated for a (hypothetical) 3-year year the market prices for gas was $2.50 and Apple got a "deal" at $2.40.  Now suppose a year into the contract the market price of gas is $1.50.  There is nothing wrong with Apple reaching out to it's supplier with a proposal to scrap the remaining 2 years at $2.40 for a 5 year deal at $1.75.  This is all hypothetical, but it's exactly what's Apple's being "accused" of doing with these landlords.  They aren't "threatening" to renege on their existing deal, they are simply offering to negotiate a new deal within the context of a major drop in the commercial real estate market.  Why should Apple do anything else? 

    And this has absolutely nothing to with with how much taxes Apple pays or how much profit it made.  The market price is the market price and Apple is right to react to changes. 
    FileMakerFeller
  • Reply 38 of 46
    I’m ambivalent as well.  When the rents were skyrocketing, the owners were simply “Charging what the market allowed,” and now Apple is simply, “Paying what the market will support.”
    randominternetperson
  • Reply 39 of 46
    razorpitrazorpit Posts: 1,796member
    razorpit said:
    Torn on this one. As a share holder I say right one Apple. Pressure them to the lowest point you can get them.

    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.
    Have you considered Apple Store employees have families and mouths to feed just as landlords and the paychecks to Apple Store employees have not been cut during this pandemic? Also, have you considered how landlords have evicted tenants who cannot pay full rent during this pandemic?
    I don’t get your point. Are you implying Apple can’t afford to pay employees? Or Apple can’t afford to pay rent? If I’m a landlord and have tenants who can’t or won’t pay do I keep them and go under myself, or do I kick them out and bring someone in who can afford it?
  • Reply 40 of 46
    1348513485 Posts: 194member
    GeorgeBMac said:Translation:   "It's dog eat dog, survival of the fittest!"
    It always surprises me how those with no morals, ethics or values can rationalize depraved corruption.

    They think the world is comprised solely of sharks and treat it that way -- but then have to make up excuses to justify their actions when challenged with the reality that people, governments and corporations who survive long term typically operate from a set of values and morals that guide their actions.

    Sorry, but extortion is still extortion and it is still wrong no matter who does it.
    Hyperbolic a little. How is it extortion? Landlords are quite used to dealing with demands / requests from tenants. They can simply say no, the lease terms still apply, thanks for your interest, close the door on the way out. Or they can amend the terms to accommodate the request in whole or in part, and may try to extend the lease at a higher rent down the road to recoup the income. No blood is shed.

    Neither party is quite so sensitive as you seem to think they are. It's business and it's common.
    SpamSandwichrandominternetperson
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