Global retailers, including Adidas AG and Hennes & Mauritz AB (H&M), sparked outrage in Germany on Sunday after announcing they planned to stop paying rent on stores that have been forced to close over the coronavirus outbreak.
German Minister of Finance Olaf Scholz urged leading companies to refrain from taking rash action that could hurt property owners.
“It’s irritating when large companies simply announce a halt on paying rent,” Scholz told the Bild daily, urging retailers to reach out to landlords to find solutions.
“Now is the time to work together,” he said.
The move came after the German government unveiled a major rescue package to protect companies and jobs from the economic impact of the pandemic.
It includes a provision that temporarily shields tenants from being kicked out of their homes or business premises if they experience financial hardship over the coronavirus measures.
However, German Minister of Justice Christine Lambrecht said company bosses should not to take advantage of the measure.
“It is indecent and unacceptable if financially strong firms now just stop paying their rents,” she said in Berlin on Saturday.
German sportswear maker Adidas, which made a net profit of nearly 2 billion euros (US$2.2 billion) last year, has been hard hit by a slump in Chinese sales and massive store closures.
The company, one of Germany’s best-known brands, told Deutsch Presse-Agentur (DPA) that it was “temporarily suspending rental payments, just like many other companies.”
German Minister of Transport and Digital Infrastructure Andreas Scheuer said he was “disappointed by Adidas,” pointing out that many small landlords would be left out of pocket.
German Member of the European Parliament Katarina Barley tweeted that she had bought her last pair of Adidas trainers, in a post that received more than 9,000 likes.
However, the Bavarian giant hit back, with chief executive Kasper Rorsted telling yesterday’s edition of the Frankfurter Allgemeine Zeitung that the bulk of Adidas’s German landlords were “large real estate companies and insurance firms” who had “mostly shown understanding” for the rent freeze decision.
Adidas would continue to make payments to small private landlords, he said.
“They will receive their April rent as usual,” he said.
Swedish clothing giant H&M likewise said it would not be paying rent on its 460 or so closed stores in Germany, telling DPA that it had informed landlords and hoped to find “a mutually acceptable solution” soon.
German shoe store chain Deichmann SE intends to suspend rent and service charges from next month for the duration of the government-ordered closures.
A spokesman for the Essen-based company told DPA that it expected those with political responsibility “to compensate for the lost rental income of the affected parties.”
Other German media outlets reported that electronics retailers Media Saturn Holding GmbH and MediaMarkt as well as Adidas rival Puma AG also planned to halt their rent payments for now.
The Ceconomy group that owns Saturn and MediaMarkt on Sunday said that it intended to apply for state aid to weather the coronavirus crisis.
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