IF YOU THOUGHT THE JURY WAS OUT ON TURNOVER RENTS:

NEXT HAVE CERTAINLY RETURNED A MAJORITY VERDICT.

Whilst the sector grapples with the imminent return of non-essential retail, a clear message for the retail property industry has been issued by Next plc who recently published their financial results for the year ending January 2021. Within the document which reports on many aspects of their business, they reported 33 renewals adopting the turnover model versus 22 for the more traditional fixed rental charge. It is important to note that these negotiations were made with a healthy business and not wrapped up in any coercion or pressure that might have been linked to a CVA – this was one of the UK’s leading retail businesses exercising its preference for a more equitable and partnership-based approach to paying the occupancy costs for its store estate. The Next plc preference for turnover rent equates to a 60% majority – a magic figure in politics and governance matters as it is called a supermajority. Across the globe when a groundswell of opinion reaches this level of “those in favour” it gives greater powers to leaders, governments and lawmakers to usher in new ways of doing things and phase out policies and procedures that no longer work efficiently. Operators like the turnover model