The fragile nature of the commercial property market was laid bare yesterday when a number of high-profile, high street names called in administrators.
Among those was the Harveys furniture group. While there is no Harveys store in Hastings its subsidiary Bensons for Beds is a tenant of Hastings Borough Council in Bexhill Road.
The chain, which is owned by private equity firm Alteri Investors, was already struggling even before the coronavirus pandemic struck.
“A combination of structural issues and Covid means we are going to have to leave behind the underperforming part of the business,” said Chief Executive Officer Gavin George.
While Bensons for Beds also fell into administration it was immediately bought back by Alteri in what is know as a prepack deal.
Under the deal Alteri says it plans to keep up to 175 of Bensons for Beds 242 stores as well as its manufacturing operation and nearly 1,900 jobs but that leaves 67 stores at risk of closure.
Zelf Hussain, a spokesman for joint administrator at PwC said the two furniture chains had faced ‘cashflow pressures’ in recent months, which were, “exacerbated by coronavirus on the supply chain and customer sales.”
In November last year Carpetright, another tenant of Hastings Borough Council in Bexhill Road was rescued when it was acquired by Meditor Holdings. Carpetright had been struggling for several years and fought off its collapse last year by entering what is known as a Company Voluntary Arrangement (CVA) restructuring that closed shops and negotiated reduced rents with landlords including Hastings Borough Council.
Hastings In Focus has asked Bensons for Beds new owners what the future is for the Hastings store and we have also asked Hastings Borough Council for a comment on these latest developments.
The future of the store may depend on whether the council is prepared to negotiate a lower rent for the property. When Debenhams fell in to administration in March, for the second time in a year, it began negotiations with landlords over rents and stores where no new deal could be reached were shut down.
Figures published at the weekend revealed the extent of the crisis in the retail property as trade magazine The Estates Gazette revealed that landlords of retail properties had been paid only around 14 per cent of what they should have been paid during the month.
Former Liberal Democrat parliamentary candidate Nick Perry has reminded Hastings Borough Council that it was warned about the risk of its property investment schemes: “A number of very expert residents as well as the Liberal Democrats were all over social media warning Labour councillors about the dangers of a high risk commercial property portfolio. At that time, the Lib Dems were arguing for monies to be pumped into green(ed) social housing and start-up business hubs – to cater for our local population’s creativity – rather than big retail,” he says.