“It is indecent and unacceptable for financially strong companies to stop paying their rents,” said the German justice minister.
The Adidas and H&M groups sparked outrage in Germany on Sunday (March 29th) by announcing their intention to stop paying the rent of stores forced to close because of the coronavirus epidemic.
Finance Minister Olaf Scholz urged big business to refrain from rash action.
“It is irritating that large companies simply announce the end of rent payments , ” Olaf Scholz told the daily “Bild”, urging retailers to approach owners to find solutions.
“Important rescue plan”
German sports equipment maker Adidas, which made a net profit of nearly 2 billion euros ($ 2.2 billion) in 2019, was hit hard by the collapse in sales in China and the massive closings of stores.
The Bavarian company, one of the best-known brands in Germany, told the DPA news agency that it “temporarily suspends the payment of rents, like many other companies” .
Swedish clothing giant H&M has also announced that it will not pay rent for its 460 or so stores closed in Germany, but told DPA that it had informed the owners and hoped to find “a mutually acceptable solution” soon. .
The announcements come as the German government unveiled a major bailout plan to protect businesses and jobs from the economic consequences of the pandemic.
This plan includes a provision that temporarily protects tenants from the risk of being evicted from their home or business if they experience financial hardship as a result of the anti-coronavirus measures.
“Indecent and unacceptable”
But the Minister of Justice, Christine Lambrecht, warned business leaders not to seek to take advantage of it. “It is indecent and unacceptable for financially strong companies to stop paying their rents,” she said on Saturday.
The German shoe store chain Deichmann also intends to suspend rent from April for the duration of the government-ordered closings. A spokesman for the Essen-based company told DPA that it expects politicians to “compensate for the loss of rental income from the parties involved” .
Other German media have reported that electronics retailers Saturn and MediaMarkt and one of Adidas’ rivals Puma are also planning to stop paying their rents for the time being.