Richard Cressall quoted by The Guardian on John Lewis service charge refusal

Richard Cressall, partner and commercial property expert at Gordons, has been quoted in The Guardian reacting to the news that John Lewis is refusing to pay service charges to landlords in an effort to cut costs.

The retailer has threatened to withhold as much as a fifth of payments it owes some landlords this quarter, after facing “unacceptable” annual service charge rises in shopping centres over the last few years.

Richard said: “This is a very unusual move, but it is reflective of John Lewis’s position in a challenging retail market. Pretty much no other tenant would be in a position to take John Lewis’s anchor stores at shopping centres in this market or to create the footfall they do, which all but rules out the most severe potential remedy, repossession.

“Instead, landlords will have to go to court to recover the service charges, but this is costly and will take time, particularly bearing in mind the complexities over floor space weighting when calculating retail service charges.

“Those landlords who do persevere should succeed, but in this market,  I think at least some landlords will choose to do a deal rather than fight in court, which must be what John Lewis is hoping for.”

You can read Richard’s thoughts on The Guardian website here.