To pay or not to pay: Retailers are making tough decisions on rent and other bills

The opening salvos have been fired in a "showdown" between tenants and landlords as retailers try to preserve cash amid mass closures.

What happened

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Why it matters

Last week, Urban Outfitters said publicly what many retailers are discussing in private: that it won't be paying rent. In the middle of a list of financial measures Urban said it was taking while its stores are closed, the apparel seller included the suspension of rent payments.​

The retailer followed the Cheesecake Factory in doing so. The restaurant chain said in a regulatory filing that it would not be paying rent on its leases for the month of April. After that first shot, Urban Outfitters joined, followed by PVH (owner of Calvin Klein and Tommy Hilfiger) and bankrupt home goods seller Pier 1. More retailers, whether they announce it publicly or not, are almost certainly planning to skip rent as well.

Landlords, on the other hand, might not see rent as optional, even during a pandemic. In fact, one major retail landlord, Taubman, told tenants that it still expected rent payments, even with most of the operator's malls closed.

This news brief is based on reporting published by Retail Dive on 2020-04-06. The original report is linked below.