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Rent system 'must change to help retail firms'

Date Added: 24/01/2012  

Retail companies may need to take business debt advice in order to meet their rent payments, as some commercial property landlords ask for money up to three months in advance.

This is according to Sarah Cordey, spokeswoman for the British Retail Consortium (BRC), who noted this is placing added pressure on companies in the sector.

She described 2011 as a "difficult" year for the industry and claimed the boost provided by the festive period was not enough to make up for the struggles of the previous 12 months.

The BRC is calling for the current system to be abolished and landlords to instead be happy to sign up businesses to a one-month in advance lease, so they are not forced to fork out for three months of rent all in one payment.

Ms Cordey said: "The quarterly thing is an anachronism in this modern day and age, when you can make instant bank payments so quickly. So we'd like to see more landlords move to that monthly payment approach, which would iron out some cash flow issues."

She noted while there can be a wide range of reasons behind a firm being served with a winding up order, in many cases it is due to the fact their rent payments are due and they cannot afford to meet them because of problems with their cash flow when the bill has to be paid.

There was little growth in the retail sector over the course of the year, with inflation running at around five per cent for much of 2011, which led to issues for retail firms, she added.

Earlier in the month, the Office for National Statistics revealed there was a 2.6 per cent increase in sales volume over the Christmas period year-on-year, while the value of sales was up by 6.2 per cent on 12 months ago.

Need advice on Winding up Orders? Call 0800 9020123

Posted by Julie Cutts

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