Retailers face ‘perfect storm’ of September rent day

The rental payments will be made at a time when under-pressure retailers are having to deal with the extra burden of the Olympics and poor weather restricting sales over the summer, reports The Telegraph.

The challenges facing the high street have been highlighted by the demise of JJB Sports, which is set to call in administrators.

Begbies Traynor said that 15,312 retailers are “experiencing significant and critical financial distress”, while property agent CBRE says JJB will be the 42nd retailer to fail this year and that in the first half of 2012, 40,000 retail jobs have been lost.

The quarterly rent day remains a significant moment for the retail industry.

Despite retailers protesting that paying rent three months in advance is “archaic” and puts pressure on cash flow, landlords have only authorised a small group of retailers to pay rent month-by-month.

Julie Palmer, partner at Begbies Traynor, said: “The important last quarter of the year is increasingly looking like a ‘Russian roulette’ trading season for retailers.

“A combination of stores needing to be fully stocked for the key Christmas trading season, suppliers asking for ever shorter payment terms and shoppers playing a waiting game for price reductions and sales will put considerable cash flow pressure on those retailers already experiencing financial distress.”

Jonathan De Mello, head of retail consultancy at property agent CBRE, said the rent payment has “clearly come at a bad time”.