Large corporations' freeze on rents in the Corona crisis is heating people's minds. Adidas has even been facing a boycott campaign for a few days after it was announced that store rents would be suspended. The fact that Adidas boss Kasper Rorsted has now put into perspective and explained that private landlords continue to receive money and only payments to large real estate groups are suspended has not helped much. After all, Rorsted proudly presented a profit of almost two billion euros just a few weeks ago.
Now Heinrich Deichmann also spoke in an interview with the Handelsblatt about rent deferrals for his company. Deichmann rejects the accusation of refusing to pay rent at the expense of other parties. "The reproach in the discussion about rents that we would enrich ourselves in the crisis hits me deeply," says Deichmann. "We are in negotiations with the landlords on how to deal with the deferrals." Large landlords such as shopping centers and insurance groups are more likely to be able to pay for the deferrals. "And if individual landlords are not able to defer payment, we will continue to pay."
How long Deichmann holds out
Deichmann also points out how existential the crisis is for his shoe empire with a turnover of 6.4 billion euros. Because currently not only the 1,500 branches in Germany are closed, whose workforce will go into short-time working from April 6th. "We have now closed our stores in 28 of 30 countries, and we have 600 stores in the United States alone. We currently lack 96 percent of total sales."
If you are forced to close your business and the costs continue to run, you will inevitably run out of money at some point, says Deichmann. His company had to pay invoices in the hundreds of millions every month – "with almost no income" because the earnings from the online business are still very low at Deichmann. "We'll be going through this for four weeks," says Deichmann. "If we talk about three months or more, it gets serious."
The private wealth of the Deichmann family would then not be enough to save the company. "The assets that would be necessary to save a company with a turnover of 6.4 billion euros and a correspondingly high cost block, just in case, do not exist privately with us."
This article was originally published on stern.de.