Sportsgirl defends $2.3 million rent claim for flagship Melbourne store

Popular fashion retailer Sportsgirl has been taken to court accused of failing to pay $2.3 million – but the clothing company denies any breach.

Sportsgirl has rejected breaching its lease by allegedly failing to pay more than $2.3 million in rent for its flagship Melbourne store, claiming the agreement was frustrated by the pandemic.

Great Union Pty Ltd, trustee of the Centrepoint Melbourne Trust, has taken the women’s retailer to court, seeking payment of $2.307 million in outstanding rent for the CBD store, plus about $80,000 in interest.

In a writ before the Victorian Supreme Court, Great Union alleges Sportsgirl breached the terms of its seven-year lease by failing to pay monthly rent, plus interest, from April 1, 2020 to December 31 last year.

Sportsgirl has been taken to court over unpaid rent in Melbourne. Picture: NCA NewsWire/ David Crosling

However, Sportsgirl has denied breaching the terms of its lease, blaming the unforeseen economic fallout from the pandemic for the store closure amid government restrictions.

“The COVID-19 pandemic was so unexpected that it could not have been in the contemplation of the parties at the time of entry into the lease,” the fashion retailer said in its reply to the court lodged in January.

“It frustrated the commercial purpose of the lease.”

Sportsgirl said the parties had entered into the lease assuming the retailer would be entitled to use the premises for trade and that consumer access to the store would be unrestricted.

“The common assumption was fundamental to the performance of the lease,” the retailer argued.

However, the outbreak of COVID-19 in Australia from early March 2020 had led to a state of emergency in Victoria and government shutdowns of “non-essential activity” such as retail shopping, to prevent the virus spreading.

Sportsgirl said the economic impacts of the pandemic, government restrictions and public concern about the risk of spread had a “seriously deleterious effect on foot traffic and retail trade in the Melbourne CBD … causing Sportsgirl to be unable to generate sufficient revenue to cover its financial commitments.”

The matter will be heard by the Supreme Court’s commercial division at a date to be fixed.

Originally published as Sportsgirl defends $2.3 million rent claim for flagship Melbourne store