Updated: H&M Statement, 4:15 p.m. ET
In response to FN’s request for comment, a spokesperson for H&M provided the following statement:
“We have a good and close partnership with all our landlords across our markets. Many understand the challenging situation we are facing and have chosen to cooperate with us during this extraordinary period. We always value our partnerships with the landlords and will continue to develop sustainable solutions that are suitable to both parties with the intention to handle this period in the best way possible.”
What We Reported Earlier, 11 a.m. ET
H&M has been hit with a lawsuit by its landlord after failing to pay rent on its New York City flagship.
According to a complaint filed in New York state court by Herald Center Department Stores of New York LLC. on June 2, H&M has missed $4,220,788.54 in base rent and other charges on its store in New York’s Herald Square. The landlord is seeking to recover the roughly $4.2 million as well as for H&M to cover attorneys’ fees.
Watch on FN
H&M skipped rent payments while dealing with the fallout from the coronavirus — one of several changes the retailer made to cut costs. H&M announced in late March that it had taken “several measures” to reduce costs in the areas of buying, investments, rents and staffing in light of the coronavirus crisis. As one of those measures, H&M furloughed a portion of its workforce in the United States, while stores in some of its biggest markets — also including Germany and the United Kingdom — remained closed as a result of the coronavirus pandemic. In April, the fast-fashion chain announced it had secured a 980 million-euro, or $1.1 billion, revolving credit facility to help cushion its business amid the health crisis. The company also has an undrawn facility worth 700 million euros, or $760 million, which it signed in 2017 and is set to mature in 2024.
A number of other retailers, such as Urban Outfitters Inc., Nordstrom and Burlington Stores, also missed rent payments while stores were shut during the coronavirus pandemic. And H&M is not the only company being sued over failure to pay rent.
Just this week Gap Inc. was sued by Simon Property Group for nearly $66 million in skipped payments. The apparel and accessories chain was also sued last month by a New York City landlord for skipping fixed rent and other payments worth $530,334.39. Additionally, Palm Springs Mile Associates Ltd. sued Ross Stores Inc. in Florida district court in May, accusing the off-price chain of owing $5.5 million in back rent on three stores. Also last month, the NBA was sued in New York district court for owing roughly $1.25 million after missing two months of rent, plus additional charges, on its Midtown Manhattan flagship.