Italy’s Confindustria Moda asks retail landlords to accept suspension of rent payments
Mar 26, 2020
In a letter to commercial premises landlords, Confindustria Moda, the body representing the Italian fashion industry, has asked that lease payments by fashion retailers be put on hold. The appeal was prompted by the need to stem the damage to the retail sector caused by the Covid-19 emergency in Italy, after the government put a temporary stop to all commercial activities until April 3.
“The concern is that the date for the [stores’] re-opening will be further pushed back and that, as a result, the companies we represent will not start selling again, while still having to pay their commercial rents in full,” said Confindustria Moda President Claudio Marenzi.
Retail revenue is zero, because finished goods can’t leave the stores and may be held there even longer than foreseen, beyond the term set by the government’s decree, given that the health emergency in Italy seems far from being resolved. It therefore becomes impossible to pay rents, “which have become too onerous and no longer sustainable by companies,” said Marenzi, who asked landlords to accept a suspension of rental payments until stores will open again.
He urged lessors to “renegotiate the terms of the contracts until the time when the normal commercial, tourist and residential income flows will be fully re-established.”
Confindustria Moda’s letter was signed by over 50 companies, including Casadei, Corneliani, Dainese, F.lli Rossetti, Gallo, Calzedonia, Herno, Moncler, Roberto Cavalli, Ferragamo, Trussardi and Valentino.
The Italian fashion industry association represents 66,000 companies with 580,000 employees, generating an annual revenue of €95.5 billion. In addition to the closing down of stores, many of its member companies are also having to deal with the shut-down of the majority of manufacturing output in Italy, decreed by the government on March 25.
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