Apple has asked landlords in the UK to halve the rent they pay and offer free rentals, according tomedia AppleInsider. Apple’s physical retail stores in the UK have been closed for several months as a result of the COVID-19 outbreak, with all 32 stores in the UK returning to business from 15 June. Apple is trying to recover some of its lost retail profits, as a result of the new crown closure and efforts to keep the social distance away, and it appears to be doing so by reducing costs at one of its major stores.
Apple has approached some landlords at 38 UK retailers to ask them to make some changes to the lease agreement under the COVID-19 block, the Times reported. The changes are understood to include a 50 per cent cut in their rent payments and the need not to pay rent to landlords for a period of time. In exchange for agreeing to the changes, Apple is prepared to extend its lease with the landlord for a few more years.
While this may seem like a bold move for Apple, the attempt could also bring it in line with other retailers, which are benefiting from low rents, offered by landlords keen to keep the shopping centre full. In addition to paying high rents, homeowners can also benefit from Apple, because the presence of the Apple Store does help increase consumer traffic in the region, which in turn helps other retailers sell.
Apple’s offer is believed to have been offered to the owners with a few years left on the store’s lease, and the owners are under no obligation to make a decision any time soon.
However, the demand has also created some friction, as Apple’s latest quarterly results showed an 11 per cent jump in revenue to $59.7bn. In July, British documents showed that Apple had $1.8 billion in annual sales, but the company paid only $8 million in taxes.