Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple Asks UK Retail Landlords for 50% Rent Cut Despite Record Sales
- Thread starter MacRumors
- Start date
- Sort by reaction score
I do not know what their deals are in the UK, but I do know that many of their mall stores in the U.S. do not pay a percentage of revenue. Mall owners have realized that Apple stores are the ultimate anchor tenant. They generate so much foot traffic that they float many of the other stores.
It would be much worse (as would it be if they moved when their leases expired). The longer term lease has a great deal of value, but there are simple calculations (Net Present Value) that will let them determine if it is worth it for them. Simply a business transaction. Apple is not forcing anyone to do anything. They are trying to reach a mutually beneficial deal with one set of their suppliers.
I have seen many businesses not being able to afford the rental increases. Eventually owners have to move, or shut down their business because there's nothing else available. Retail spaces rental rates are going through the roof. So we have a lot of unoccupied shop spaces that stay vacated for years and years. 10 plus years is no exception. And all because the landlords want to keep their high rental rates, because that looks great for the value of the properties on their books. They could have had rental income on those vacated properties for years, but they won't accept lowering the rent.
Literally no one here would be defending this if it was Microsoft or Google trying to do this. You people are pathetic.
I believe they now average around 2% payments. I think they were at 15% when they started out.
[automerge]1596397935[/automerge]
Of course we would defend it. They are offering a deal. Nobody has to accept it. Who are they harming here?
If their retail operations are unprofitable, they should close them. It doesn't seems like it would hurt them to do so.
There is a reason for Apple to pay market rates – they signed a contract (and probably paid over the odds to get the best locations). However, it sounds like they are negotiating for a better deal by extending their lease (something I think landlords may have to accept). It's come across as bad PR though as so many retailers asking for reduced rents because they are on the brink of collapse.
In the UK, many landlords are struggling. Many of the large shopping centres are on the brink of collapse and I don't think any of them are worth the equivalent of a billion dollars. They won't want to lose big retailers and Apple knows this.
Totally agree with this. I don't like the company but they make the best products for my needs.
Somehow regular people out of work who’ve lost their job with no government assistance are told to suck it up and continue paying their full rent or go homeless, but the richest company on the planet feels entitled to a discount. It’s disgusting behaviour and it’s pathetic to defend it.
You can be good for employees and customers and still be ruthless with your suppliers and business partners. I simply do not care that they are ruthless against property owners on the scale to 10 to several thousand millions of pounds.
The Norwegian Sovereign Fund bought two properties on Oxford Street in 2016 for about 360 million pounds.
That fund was at the end of 2019 worth about 855 214 million pounds.
I am not loosing any sleep if Apple gets a 50% discount from this fund, even though I am a Norwegian.
They aren’t asking for a discount for free. They are offering to renegotiate for a short term reduction in exchange for a longer lease. And the landlords are not being forced to accept the new deal. If the landlord thinks it’s a win-win, what, exactly, is apple’s crime here?
Nothing is achieved by just thinking about it. How can you get a better deal without asking for it?
Negotiation has to involve communication and how would the landlords know what you want unless you tell them?
I'd call it using their heft to try and squeeze a better deal out of a supply company (something they're very aggressive about doing in all parts of their business) - this is asking for both a rent-free period and a longer term rate cut of up to 50% - meaning basically they want to lock in what will be a below-market rate when things begin to recover. No wonder they'd then want to lock that in for a longer term which is what they're 'offering' in return =P
This is against the backdrop of a lot of other store closures which will likely put more pressure on these companies who are just trying to maintain a functioning business out of this themselves not to lose another client, one which is almost certainly a big anchor store in most locations.
What are you willing to offer Apple, in writing, in exchange for the discount?
This. It's merely "Capitalism 101," and I'm surprised at all the sudden converts to socialism around here.
Last edited:
Based on the deal indicated here that they are supposedly offering landlords, I similarly will offer to buy an iPhone 13 at 50% off, maybe even the 14 the following year at the same. They and the defendants on here cannot possibly grumble at my suggesting such a deal. Although, I am sure they will.
No, they aren’t demanding the 50% rate cut through the duration of the extended lease.
And so what if they were? If the landlords determine that whatever apple is offering is unacceptable, they don’t have to take the deal. And then, when the lease is over, Apple can go elsewhere.
So what?
The news report says they have offered multi-year lease extensions in exchange for current reductions and concessions. This is a simply business transaction between two parties. Apple has not ceased to pay anything nor threatened anyone. They are offering a set of terms that the property owners can accept, counter or reject. I cannot understand why anyone cares.
If the property owners do not want to take the deal they do not have to do so. They have to weigh the future value of a guaranteed tenant when their are likely to be even fewer retailers who want the space, against higher revenue now.
Some will take it, some will not.
I will defend any company or any person trying to negotiate any contract at any time (during daytime)
Although, if you don't succeed you should wait some time to try again.
Ultimately? Nothing. Just wish those Apple evangelicals could see the cutthroat company behind the soft cuddly PR. Apple waxes lyrical about sustainability, social responsibility etc but thinks nothing about sh*tting on those companies that supply them, that literally enable their operation to exist. Can't say they're alone in this by any means, though they do seem to be among the most aggressive at it.