Major sushi chain Wasabi to negotiate turnover-based rents

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Accountancy firm KPMG to lead discussions with landlords.

The sushi chain Wasabi is to fight for a new way to pay for retail rent in light of the reduction in revenue social distancing will cause.

Wasabi has 60 stores, 37 of which are in Central London, and been feeling the effects of the coronavirus since the entire industry was put on ice on March.

In a press release published in the Caterer, Wasabi Chief executive Henry Birts said in these challenging times for the HORECA industry there “is now a big question mark over how and when demand will recover”. This is even as Ministers have identified the 22 June in the UK as the date when they hope to reopen England’s pubs and restaurants serving customers outdoors.

“And as it does we then have the challenge of managing capacity and speed of service in our kitchens and front of house alongside restrictions around social distancing,” he added.

In 2019, the grab-and-go chain sushi sold a minority stake to the investment firm Capdesia Group for its expansion and refurbishment programme. It also has a partnership with Marks & Spencer.

Turnover in 2019 was GBP 106 million but it had an operating loss of GBP 7 million.

So what are turnover-based rents? One traditional model if these kind of rents is when the tenant pays a) a minimum base rent and b) an additional rent which is calculated on a percentage of gross turnover.

This means that rental liability will reduce in poor trading conditions. In turn, from a landlord’s point of view, the “main benefit is that, when a tenant trades above expectations, the landlord benefits immediately rather than waiting for a rent review,” explained the estate agents Mac and Mac.

Wasabi sources both Scottish and Norwegian salmon for its sushi.