Foot Locker asks court for €500,000 rent cut over lockdown closures
Posted on 19th October 2021 at 19:55
Operator of Grafton St store says landlord should share some of the pain caused by closures
The operator of a Grafton Street footwear and clothing store is asking the High Court to declare it has no liability for more than €500,000 in rent during 253 days of pandemic-ordered closures.
The Foot Locker store accepts the rent was only part paid to its landlord Percy Nominees Ltd for the lockdown days but says the landlord should share some of the pain caused by the closures.
It claims the store is still suffering from low footfall and is now trading in a very poor location.
Foot Locker Retail Ireland Ltd seeks a declaration that, by reason of the Government ordered lockdown, it has been unable to trade from Grafton Street and therefore the lease between it and the landlord has been partially frustrated.
The rent on the store is €750,000 per year and Foot Locker only paid part of the rent during the lockdown.
Percy Nominees says it is “nothing more than a transparent and ill-judged attempt to unilaterally renegotiate the terms of the lease for the commercial benefit of Foot Locker.”
Percy Nominees contends Foot Locker is obligated to pay rent in accordance with the terms of the lease. It is dependent on the rent roll from Grafton Street and other premises its leases to support its business operations and discharge its liabilities
On Tuesday, John Lowry, Foot Locker Retail Ireland real estate director, told his counsel Gavin Ralston SC the number of days the store was directed to close by the Government was 243. The rent in dispute was just over €519,000, he said.
Under cross examination Aidan Redmond SC asked Mr Lowry if a statement he made for this case about the lease having been frustrated meant it was at an end. The witness replied it had been “temporarily frustrated”.
Asked why Foot Locker offered part payment during the pandemic, he said he was attempting to come to some agreement with Percy Nominees as Foot Locker had done with every other landlord of its stores in Ireland.
He accepted that by saying the lease had been frustrated that it conveyed the intention that Foot Locker would not trade from Grafton Street for the remainder of the lease, which lasts until 2025. Mr Lowry said this was the position in June last year but now it does intend to trade until the end of the lease.
He said: “We are trading albeit very badly”. It was not like it used to be and is “a very poor location”.
They were doing their best to trade but none of the high level of footfall and high spending footfall envisaged by the Grafton Street location was there today, he said.
He agreed with counsel that none of those matters were relevant to the interpretation of the lease but “we believe the landlord should share some of the pain”.
This landlord had not engaged to Foot Locker’s satisfaction in discussions about sharing that pain, he said.
He agreed with counsel that there is no provision in the lease where the tenant does not pay the rent “according to its satisfaction “ or that there was anything in it saying the tenant shall reduce the rent.
Mr Justice Brian O’Moore said he would hear an application on Wednesday from Foot Locker to amend its statement of claim to include a claim for unjust enrichment by Percy Nominees.
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