High Street failures highlight need for Landlords to seek lease advise, says Clarke Willmott

Landlords impacted by the collapse of The Body Shop need to seek urgent advice about the options available to them under their leases.

This is the warning from leading property litigation lawyer Nicola Seager, of national law firm Clarke Willmott LLP.

Established in 1976 by the late Dame Anita Roddick, The Body Shop went into administration this week in what was the most high profile retail failure since that of Wilko last year.

The Body Shop was only acquired recently by private equity firm Aurelius – the third time the business has changed hands since 2006. It currently has more than 200 shops across the UK and around 3,000 globally, employing around 10,000 staff, plus another 12,000 via franchises.

Nicola Seager, who specialises in real estate management and property insolvency, says landlords of existing Body Shop premises will be affected in different ways.

“It is being reported that up to 100 Body Shop stores could close, so this will have a big impact on landlords and the High Street generally,” she says.

“When a large entity like this goes into administration, some landlords will see an opportunity to get a property back and others will be worried about whether rent will be paid. Landlords need to ask themselves what they want to achieve.

“The moratorium process which comes into play following the appointment of an administrator means pausing any legal action against the company including forfeiture of leases, providing breathing space for administrators to sell the business or realise assets in the best way they can.

“This means a landlord can’t automatically seek to enforce the terms of the lease on a tenant – their lease may say they can do so, but the law actually prevents it unless additional steps are taken.

“Either way, the overriding message to landlords is to seek urgent advice about the options available under their lease. This gives them the best chance of obtaining a better outcome.”

Clarke Willmott is a national law firm with offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton, and Taunton.

For further information visit: Specialist retail & leisure sector solicitors (clarkewillmott.com)