Westfield locks out Mosaic group store owners in rent row
The owner of Westfield shopping centres has boarded up about 129 stores run by Mosaic Group because of a rental dispute — and other retailers fear similar action.
NSW
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More than 400 staff are on the verge of being sacked as Westfield shuts the doors on squatting retailers.
Scentre Group, owner of the Westfield shopping centre empire, this week boarded up about 129 stores run by Mosaic Group, the owner of Rivers, Noni B, Katies, Millers, Crossroads and EziBuys, because of a rental dispute.
The row escalated when Scentre demanded payment of outstanding rent from the brands.
Strandbags also announced it had been forced to close 38 of its stores and other retailers have been put on notice.
Mosaic and other retailers have either refused to pay rent or paid a lower percentage of rent to Scentre during the coronavirus lockdowns.
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Mosaic had tried to reach a deal with the landlord over a new rental agreement based on sales, but it was rejected by Scentre.
This could leave about 400 workers from Mosaic alone without a job, which chairman Richard Facioni said was “disappointing”. He said they were trying to redeploy the workers to other stores.
“These actions are extremely disappointing, given the current environment, and difficult to comprehend in the context of a relationship that spans close to 40 years,” he said.
“Mosaic continues to conduct rental negotiations in good faith with all landlords, including Scentre Group, in the spirit of sharing the burden of the impact of the COVID-19 crisis, consistent with government recommendations.”
An industry insider said it was just the start, with other retailers also under threat, including the Retail Apparel Group, which owns Tarocash, Connor, yd, Johnny Bigg and Rockwear.
Strandbags managing director Felicity McGahan said they were paying rent in line with the federal government’s recommendations.
“It’s been very disappointing to be honest. It’s only a Westfield issue,” she told the Australian Financial Review.
“Given we’re a travel business we thought they would be understanding of that.
“I think we’re working well with the other landlords and working together to get the best outcome for everyone.
“We’re hopeful we can come to some level of resolution.”
The disagreement kicked off after billion retailer Solomon Lew declared he wasn’t paying rent for his Premier Investment stores while they were forced to close in March.
While most stores reopened as restrictions lifted, retailers have been negotiating with landlords for reduced rent, while some have remained closed until they can strike a deal.
Scentre Group and Retail Apparel Group were contacted for comment.