V&D stores to shrink in deal with landlords
V&D will shrink each of its 63 branches in return for the landlords of V&D department stores handing in 25 million euro in rent. That is the result of the final meeting between V&D and the landlords of its stores. V&D owner Sun Capital still hast to approve this agreement.
Both V&D and almost all of the landlords agree with the proposal that has been reached after almost three days of negotiations, Het Parool Report. Sun Capital now seems to be the stumbling block. The landlords were under the impression that V&D negotiated on behalf of its owner, but the company still needs permission from the US after concluding the agreement. Sun Capital also does not want to go further than an additional investment of 30 million euro in V&D. It is willing to provide a loan to V&D of another 30 million, but that must be repaid with interest.
The rent reduction of 25 million is roughly the same amount that V&D initially demanded. V&D stopped its opposition to the landlords' requirement to shrink the stores yesterday. V&D is now willing to negotiate per store with the landlords on returning square meters which the landlords can fill with new stores. There will be an independent arbitration that will give binding rulings in conflicts between V&D and landlords.
V&D's requirement to pay future rents based on store turnover is also off the table. The property owners will also now share in the proceeds of subletting by V&D. The landlords will have access to the financial results of their stores, but will not directly interfere with the business.
V&D still has to come to an agreement with its employees. The unions indicated yesterday that they are willing to allow a 2 percent wage cut in exchange for job security. According to the unions, V&D did not address this. Both unions will be continuing with their lawsuits.
In addition to the unions, V&D also has to satisfy its suppliers. The company will only partially (or not at all) pay some of its vendors this month Some suppliers, such as CB (formally Centraal Boekhuis), have suspended their deliveries.