Fast-food chains Leon and Pret A Manger are demanding rent cuts from landlords as the restaurant industry fights for its life.
Leon, led by John Vincent, has hired advisers from restructuring firm Quantuma. Pret has hired Alvarez & Marsal and property consultancy CWM to cut costs. Both chains are pressing landlords to accept new terms, including linking rents to turnover.
Leon and Pret are among the high street brands thrown into crisis by the pandemic. Even when restaurants and fast-food chains do reopen, footfall is expected to be low as employers keep staff working from home. Pizza Express, which is grappling with a £1.1bn debt pile, has hired Deloitte to look at options, including a company voluntary arrangement, an insolvency process used to cut rents and close stores.
Many of the leading names in hospitality have responded to the lockdown by demanding rent-free periods from landlords. Hotel chain Travelodge, owned by American hedge funds Avenue Capital and Golden Tree Asset Management, and the Wall Street bank Goldman Sachs, plans to abandon £140m of rent payments.
The government has temporarily banned landlords from using statutory demands or winding-up petitions.
Property tycoon Nick Leslau, whose Secure Income Reit owns more than 120 Travelodges, has written to business secretary Alok Sharma warning that the government’s interventions are having “unintended consequences” and will destroy “value for UK pensioners and savers to the benefit of offshore private equity investment funds”.
“We urge the government to reconsider its approach to landlords’ ability to protect their interests, and those of their stakeholders … where tenants can afford to pay, yet choose not to,” he wrote…