T2 joins store closures as retailers fight for life

Derek Muirhead, managing director of T2, said the retailer had longstanding partnerships with its store landlords.

“We’re currently talking with them about how we can navigate these difficult circumstances together. Clearly we’re operating in a challenging and unprecedented economic environment and it’s important that we work together to ensure we’re in a position to resume store trading when it is safe to do so,” Mr Muirhead said.

Some of T2’s stores, like the one which traded for at least a decade on the corner of Church and King Street in usually bustling Newtown in Sydney’s inner west closed recently and won’t reopen.

JLL Sydney estate agent Steven Tsang, who last sold the building in 2018 for $4.55 million, said King Street was full of ‘For Lease’ signs because “crazy landlords were evicting tenants”.

A little further down the road, the former Dove and Lyre Crystal and fossil shop stands empty and stripped of merchandise, though a sign over the door says its will re-open.

The store is up for rent, asking $450 a week.

“Yes it’s been closed for a while. Lack of customers,” said owner Di McGeary.

Retail leasing agents and tenant representatives told The Australian Financial Review there were no sign yet of mass permanent closures as tenants and landlords negotiate “in good faith” under the new code of conduct.

Fred Nucara, director of Aston Commercial, which manages more than 1000 retail tenancies, said his firm was dealing with hundreds of requests for rent relief.

Mostly, he said, tenants and landlords were showing a lot of goodwill to help ensure they both survived, but conceded that over time there would be some retailers who closed permanently.

He also criticised some of the national franchises for their initial approach of choosing not to pay rent without discussing their situation with their landlords or verifying their financial stress.

“For a national company not to pay rent, they need to show their turnover figures [to get the rent reduction]. They are not above the law.” he said.

At The Spot in Randwick, two hair salons recently closed their premises.

LJ Hooker’s Anthony Romano, who is leasing one of the empty shops, said he was dealing with many rent relief requests.

‘Some shops are closing because they can’t make ends meet. Most landlords are open to negotiations under the new code,” he said.

Retail tenant rep Philip Reichelt, who heads up Sydney-based Tenant Leasing Group, said most retailers were “survival mode”.

“I use the word survival a lot,” Mr Reichelt said.

But, he said, most tenants and landlords were entering discussions with a “fair and reasonable”.