LPP has no plans for a massive review of rental agreements with clauses making payments dependent on the euro exchange rate, although it wants to talk to those landlords where the clauses “are the strictest,” Vice President Przemyslaw Lutkiewicz said. He stressed that in 99% of the new contracts the amount of rent is dependent on turnover.
“We have such [inflation] clauses. For many years they were unimportant, because inflation in the Eurozone was low. Right now it’s high, so these clauses will come into effect and we will have to pay more for rents in euro terms. They are actually written differently in different contracts, in most contracts they will start from January 1 next year, but there are some contracts where on the anniversary of each contract they are included, so it has already taken effect – we are already paying these higher costs,” Lutkiewicz said during a teleconference.
He stressed that such provisions mainly apply to contracts with large shopping malls, which are “hard to talk to.” An example of this was the talks during the lockdowns.
“We will talk to those landlords where the clauses are the toughest and hurt us, but we do not foresee a massive review of all these contracts,” said the vice chairman.
What is important for LPP is that 99% of the new contracts include turnover-based rent, Lutkiewicz stressed.
LPP manages the Reserved, Cropp, House, Mohito and Sinsay fashion brands. The company has been listed on the Warsaw Stock Exchange since 2001.
Source: LPP and ISBnews
