Monday, January 26, 2015
Book Sales Shrink While The Rent Remains The Same
Last May, they shuttered the shop in Drogheda. The site had been losing money, and when the landlord wanted to take over the spot to install a cinema, it was not a difficult decision to make. When you are operating at a loss, you look around to see the source of the negative cash flow and you stop the bleeding.
While in search of savings to stay afloat, Eason realized that their location in the Liffey Valley shopping center was not as profitable as necessary. A large part of the loss was due to high rents. Fees that made sense in the glory years of the Celtic Tiger are out of line in our modern day of austerity. The owners of the shopping center were giving all sorts of discounts to newcomers willing to fill empty storefronts, even accepting pop-up type shops. At the same time, they held Eason to its lease, glad that they had someone paying full freight.
Eason was plagued by the fly-by-night operators who competed with its offerings but at a greatly reduced cost. Then there was the type of businesses that were opening and closing all around it. Who wants to shop at Eason and Sons if they have to navigate through a maze of vendors appealing to someone not likely to browse the stacks at Eason? It's all about the foot traffic and neighboring shops driving that traffic to your door. Eason and Son simply did not like doing business in an area that was in decline.
There was a bit of jealousy over the accommodations made to HMV as it fell into receivership. Like Eason and Son, the music vendor was losing to tough competition from Amazon and Apple, and the owners of the Liffey Valley center were willing to restructure HMV's lease while inventory was liquidated.
Where was the love for Eason and Son?
Ignored by the landlord, Eason and Son took matters into its own hands and held back 25% of the rent due. When that failed to generate any further discussion, the Liffey Valley location paid no rent towards the first quarter of 2015. Can we re-negotiate the lease now, the book seller shouted, and the landlord has finally responded.
By hauling Eason and Son into court over unpaid rent. Eason and Son owes over 400,000 euro in back rent, according to the suit, and the landlord wants to be paid.
Eason and Son is planning to ask for arbitration to settle the matter because they have a litany of complaints that the landlord has failed to address. Besides letting the neighborhood go to the dogs, there is an issue with smelly toilets that has put many a shopper off the browsing. The smell of raw sewage isn't amenable to a pleasant thumbing of books, and Eason wants the landlord to pay for the inconvenience and loss of business.
The biggest problem is not of the landlord's doing, or Eason's for that matter. Books have become a luxury and readers don't have the money to buy them. If the landlord were to adjust the rent to fit this modern hardship, Eason and Son would have the space free of charge.