After being criticized for its decision to defer rental payments, Adidas apologized for saying it would halt rent payments for retail locations globally that had to shutter due to COVID-19 lockdowns and that it would pay for April. The German labor minister had deemed the behavior to be not responsible and pointed out that the firm had brought in strong profits in recent years, Reuters reported.
Adidas said it would require credit despite having halted share buybacks, staff reducing their hours and executives waiving a portion of their compensation. The sportswear maker, however, understood that many viewed the decision as not having solidarity. It said, according to the report, “We would therefore like to apologize to you formally. We have paid our landlords the rent for April.”
A number of merchants throughout the globe have been aiming to have deferred rent payments as they aim to survive the COVID-19 shutdown, putting the financial burden on their landlords. The firm noted in a letter set to show up in the media on Thursday (April 2), “Almost all over the world there is no normal business anymore. The shops are closed. Even a healthy company like Adidas cannot stand this for long.”
In separate news, Subway and Mattress Firm are among the large U.S. retailers that don’t want to pay rent in full because of COVID-19’s effects on the nation’s economy. Both companies are among those that have had to shutter stores and decelerate operations as the coronavirus pandemic prompts less in-person contact in the effort to stem the contagion.
The companies are asking for rent reductions as the crisis occurs without an end in sight in the near future. That could occur via lease amendments. The courts, for their part, are likely to see a surge in disagreements in this area between landlords and tenants as April approaches.
Mattress Firm, for its part, sent landlords a letter last week providing options for how the effects of the situation could be assuaged. It said it would pay less in rent for lengthier leases.