Apple asks landlords for rent cuts in U.K. despite record earnings

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With the windows void of people, Apple Stores like this one in central London won’t be open anytime soon, sources indicate.
Photo: Richard Shrum for Cult of Mac

Despite pulling in record earnings in the last quarter, Apple has reportedly asked the landlords of its Apple Stores in the U.K. to cut their rent by a massive 50%, the Sunday Times newspaper claims.

In a report published over the weekend, the newspaper said that Apple is also asking for a “rent-free period” for a period. In return, it says that it will extend its lease for a lengthy period — although some of the stores in question have several years left on their current lease agreement with Apple.

Unsurprisingly, Apple’s suggestion has caused “consternation” among the various Apple Store building owners.

Apple’s argument is that it brings Apple in line with other U.K. retailers which have received favorable agreements during the coronavirus pandemic. As COVID-19 has hurt further hurt high streets, many of which were already struggling, some stores have received lower rent for a period.

Asking landlords for rent cuts: To do or not to do?

If the report’s accurate, it’s easy to see why Apple made the demand. But it’s not good on the level of optics. Apple has certainly not been immune to the economic impacts of COVID-19. Apple Stores around the world were closed for many weeks earlier this year. During that time, Apple lost out on plenty of sales. Some of its Apple Stores are in very expensive areas, meaning that Apple is paying high rent for returns way below its usual standards. Apple is also such a successful company exactly because it displays this kind of ruthless efficiency, whether it’s its tax system or negotiating favorable prices from suppliers.

At the same time, the situation could easily be read as profiting from the current pandemic. For all the genuinely good work Apple has done to help during COVID-19, it would be a shame if this was how the public perceived its behavior during this time.

Source: The Sunday Times

Via: MacRumors