Fashion chains Peacocks and Jaeger have today fallen into administration, putting more than 4,700 jobs and almost 500 shops at risk. The retailers, which were both part of billionaire Philip Day’s EWM Group retail empire, confirmed today that they had appointed administrators from FRP Advisory.
It is very sad when we hear about retail businesses closing down and people losing their jobs but no-one ever mentions how this affects landlords and property owners. We at Sell My Commercial Property are getting more enquiries now than ever before where landlords who own high street retail shops have lost their tenants and lost their rent and now have to sell, even if it means making a loss, to preserve at least some of their equity. For example, we received a call last week from a very sweet lady who bought a high street shop with a 1 bed flat above in a small town in Essex about 3 years ago for £390,000. She took a £300,000 mortgage and put in £90,000 of her hard earned savings. When she bought the property it was vacant but she soon managed to find a tenant to take the shop and flat and pay her a rent of £30,000. When she contacted us, she explained that her tenant had stopped trading in March and was unable to re-open in July. Therefore, she had not received any rent for 7 months and could no longer afford to pay her mortgage. She had been contacted by her lender who demanded that she pay her arrears and who said that if she was unable to do so, then she faced having her property repossessed. Further, she was told that as the property was now only worth £290,000, she would lose all of the £90,000 which she put in. When she contacted us, she was extremely emotional and upset and said she didn’t know what to do. A local estate agent had told her that they would market the property at £300,000 and hoped to achieve around £290,000. However, they wanted £1,000 up front as a marketing budget, quoted her a sale fee of £5,000 and said in this climate it could take at least 6 months to find a buyer. These are the reasons why she contacted us. We made her an offer of £310,000 in 24 hours, exchanged contracts 3 working days later and are completing next week. She is now able to repay her lender, keep some of the money she put in and put all of this stress and upset behind her.