Premier Investments chief executive Mark McInnes and billionaire rag trader Solomon Lew have intensified their attack on major landlords, accusing them of "killing" local businesses by offering cheaper rent to international retailers such as H&M and Uniqlo.
Mr McInnes pointed to the recent collapse of womenswear chain Bardot as evidence landlords offering cheap deals to international retailers had forced up rents and ruined the retail market.
Solomon Lew and Mark McInnes have accused major landlords of "killing" retailers.Credit: Paul Jeffers
"Landlords have incentivised international retailers into this space. They've diluted the market and killed companies, and Bardot is just one of those," he said.
"By incentivising [retailers like] H&M and Uniqlo and offering them more capital and better deals ... they're bringing down Australian companies, they're killing Australian jobs and they're killing Australian retailers."
Mr Lew warned Bardot's collapse would be the first of many, saying there was "more to come" in the year ahead. A number of retailers have collapsed this year including Karen Millen, Dimmeys, Roger David and Napoleon Perdis.
They're bringing down Australian companies, they're killing Australian jobs, and they're killing Australian retailers.
Premier chief executive Mark McInnes
At Premier's full-year results in August Mr McInnes and Mr Lew said they would not hesitate to close stores where landlords refused to match deals given to their international counterparts.
Mr McInnes said the business had closed 137 stores in the past seven years, claiming the landlords had been unable to find tenants to pay the same amount of rent.
Solomon Lew and Mark McInnes at the Premier Investments Annual General Meeting in Melbourne on Friday.Credit: Paul Jeffers
Tensions between merchants and landlords have reached new heights this year, with a number of prominent retailers saying they would take a harder line with landlords.
Australia's two major department store players, Myer and David Jones, both pledged to have serious discussions with landlords in order to significantly shrink their footprint. However, Mr Lew was not convinced of their success, saying landlords were unlikely to play ball.
"As long as these people can continue to pay their rent they're not going to get much from the landlord," he said.
Treasurer Josh Frydenberg waded into the debate, asking shopping centre landlords to "take it easy on those retailers" following some companies labelling the sector as "recessionary".
In September, major retail landlords Scentre and Vicinity pledged to take it easier on retailers but noted it was their job to attract retailers that would lure shoppers in-store.
"We are all very cognisant to have the best offer and we are clearly focused on having a vibrant offer for our customers," Scentre's chief operating officer Greg Miles said.
Trade pressures continue
Rental pressures have compounded the broader issues within the retail sector over the last 12 months, which has been afflicted by slowing sales and weak consumer confidence despite tax cuts and three interest rate cuts.
Trade figures for the month of September failed to show any response to the recent fiscal and monetary stimulus and Mr McInnes confirmed the company was yet to see any meaningful response.
"We haven't seen a change in momentum yet, but all those indicators...should be a net positive for consumers," he said.
Though the company did not provide any trading update for the new financial year, the chief executive said sales were "on track", but noted the Christmas crunch time was still to come.
"Any retailer who gives a forecast now is crazy because the biggest six weeks are ahead of us," he said.