Focus DIY seeking administration

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Focus DIY chain has said it intends to go into administration.

The move follows "notification of an event of default under the senior credit facility, and a realisation that there were no alternatives that could be explored any further".

Owain

Reply to
Owain
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Translation:

They want to force all their landlords to reduce the rent that they pay

tim

Reply to
tim....

Some people I know run a florist shop in the small village of Portsoy. Not exactly a bustling commercial centre.

In spite of the current economic climate, the landlords ( commercial property people based in a big city hundreds of miles away ) are demanding a massive rent increase.

The business is going to close.

What kind of world are these people living in? They are *never* going to get what they are asking in this village. The place will sit empty untill it becomes derilict.

Surely a tennant paying *something* is better than that?

Reply to
Ron Lowe

Probably hoping to get permission to sell it off as housing. Pub companies try very hard to make pubs unprofitable so they can get permission to change them to housing or yet another Tesco convenience store etc.

Reply to
Invisible Man

It's not just commercial landlords who do this - council ones do it too.

Reply to
Clive George

I'm hardly surprised. When you visit our local branch, you are frequently the only one wandering around, with perhaps another customer at the till! It's been that way for some years.

Reply to
Andy Cap

Meh, they were the poorest DIY shed by far.

Reply to
Steve Walker

And the Church - witness frequent empty shops (gone bust) near the local cathedral.

Reply to
Bob Eager

AIUI there is almost no legal regulation of rental agreements on commercial property, and is trap waiting for unwary new businesses.

A common practice is to greatly increase the rent once a business has become established at a location - on the basis that the business may not be able to afford to relocate - leaving them to be robbed by their landlord.

Reply to
dom

Then their lawyers were nodding off. You don't *have* to take the terms offered by a landlord.

Reply to
Tim Streater

Right.

But I don't understand the landlord's business model.

They buy a property. They lease it out. They jack up the rent beyond what the market can sustain, and don't seem to care. It sits empty for years, accruing zero revenue but continued fixed costs, and making an eyesore for the local community.

How does that work in their favour?

Reply to
Ron Lowe

Note leasing is different to renting

Reply to
hugh

Third time lucky is it? P

"Our management team is useless."

Reply to
Steve Firth

Yeah, I thought they'd gone bust or some other "accounting manouver" for the benefit of directors/shareholders at least once before. The one in Penrith closed years ago, the shed they had now has another name on it, Wickes.

Reply to
Dave Liquorice

Also the dearest for costs Steve,

I wanted a single tube of silicone mastic and a tube of "No-Nails" adhesive on a Saturday afternoon some weeks ago to finish a job off, and my local trade supplier was closed (sod's law working here that day).

I went to my local Focus, found what I wanted - and left it on the shelf.

The cost was blood extortionate (around £20 for the two for branded stuff - all that was on the shelf) - and I waited until my supplier was open on the following Monday and picked up a couple of tubes of mastic and a tube of "No-Nails" equivalent (all items trade and unbranded but as good as the branded stuff) for less than £8 - and the storeman even apologised because prices had just gone up that morning.

I once went to Focus for some 11/2" x 8 bright zinc screws - and you'd have thought that they were made of gold rather than steel with the price they were charging for 10 - again, I went to my local trade supplier the following day, and bought a box of 200 for £1.50.

No wonder my local store always seems empty when I go there (rarely - even with a 10% discount card).

Cash

Reply to
Cash

Actually , replying to Ron a tenant (spelling, ron) paying less is actually far *worse* than no tenant at all.

1/. It causes the value of the property to be written down. Now if its been bought with borrowed money, its asset value on the books is reduced. That can actually potentially tip the owners into 'negative equity' administration. It certainly can cause questions to be asked at shareholder level. 2/. It is prima facie cause for all other tenants in the same area to refuse to pay higher rent, and indeed IIRC go to a rent review board and get their rents reduced.

Now is been a few years since I negotiated a commercial lease in a building that had been empty for 8 years..but that was more or less the unofficial statement of the landlords agents.

Reply to
The Natural Philosopher

My knowledge of commercial leasing/renting is pretty meagre - could you elaborate?

Reply to
dom

Must admit I didn't know they were still around - thought (incorrectly I guess) they'd been subsumed into Homebase.

Neil

Reply to
Neil Williams

I don't think they were subsumed. They certainly seem to have sold some of their branches to Homebase - including my nearest branch.

And they seem to have far fewer branches overall than they used to. I recently wanted something that only they sold, and my local branch didn't have any - but I was about to embark on a 100+ mile journey, so checked for branches along the route, and there were only one or two without massive deviations.

Reply to
Roger Mills

Read Marx. 150 years on, he's still spot-on with this.

The problem is when we disconnect the use-value of a property from its asset-value. A "shop" has no value, other than when someone is using it to trade from. It is thus obviously a benefit when trading is being done from them, a waste to the community overall when it is not. However if we start to inflate the asset-value over and above this, we start to see the "value" of such a shop as being represented by some arcane calculation based on a future property value (based on what?) with an inflation allowed to expand this far beyond any credible use- value that could ever be achieved.

Mostly the inflation happens because we value a property as "for development", on the assumption that one new block will become the new focal centre of a town, thus genuinely increasing its use-value. However we also speculate here, and over-value the ten nearby blocks on that basis that if one of them might become a succcess, the asset value of each is calculated on the impossible basis that each and _every_ one of them will be the winning site. Total asset-value is now nine times the actual use-value, a situation that simply cannot ever happen. It also devalues this value by inflation - pretending to "print more money" like this can fool no-one long-term, leading to an inevitable boom & bust cycle when reality does return to bite.

When we construct a rentier economy (Marx's key point), we disconnect use-value and asset-value, allowing asset-value to take over and create a speculator economy and a speculator class, whilst doing nothing for the use-value economy that actually makes concrete goods to improve the living standards of the population in general.

Reply to
Andy Dingley

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