TFG will suspend store rental payments due to lockdown
JOHANNESBURG - South African clothing and homeware retailer TFG said on Monday it will suspend store rental payments for April due to a country-wide coronavirus 21-day lockdown that has forced all its stores to temporarily close.
“We understand that the lockdown places many sectors and the economy under tremendous pressure,” Head of TFG property, Brad Rothenburg said in an emailed response.
“In these extraordinary times we must find ways to navigate the current climate, find solutions to mitigate the impact and ensure business continuity.”
Rothenburg added that the group will assess the full financial impact of the coronavirus and lockdown, which started on Thursday midnight, once the situation stabilises and engage with landlords.
Retailers that do not provide essential services are trying to preserve cash as the lockdown is expected to affect their cash flow.
Last week the government published a gazette with exemption regulations that allow landlords and retail tenants to negotiate lower rent or rent holidays.
Liberty Two Degrees (L2D), which owns Sandton City shopping mall, said it is working with tenants and commercial property industry bodies to assess the impact of the lockdown “in order to arrive at a solution that is in the best interests of all stakeholders.”
“The objective during this time is to support our customers, tenants and service providers as well as safeguard our employees and assets,” it said in a statement, without providing further details.
As at Dec. 31 2019, 80 percent of L2D’s net property income was derived from retail.
On Thursday, the Chief Executive of non-food retailer Edcon said the firm will be unable to pay its suppliers while the lockdown is in place and may need to seek protection from creditors.
Meanwhile budget clothing and homeware retailer Mr Price said it was looking at cutting capital expenditure, slowing down new space growth and seeking rent relief.Reuters