The Hindu Business Line : Subhiksha seeks renegotiation with property owners

NEW DELHI: Hit by the economic downturn, Subhiksha Trading Services on Tuesday said it will renegotiate rentals with real estate players, amid allegations, by some property owners, of default in rent payment by the retailer.

The retail major is also considering relocation of some of its stores from the 1,600-odd total, across the country due to low sales volume and high rentals. “Yes, we would consider opportunity to lower rents... about 80-90 stores are under consideration of relocation,'' Subhiksha Trading Services Managing Director R Subramanian said in an e-mail interview.

Asked about the allegation of non-payment of rents for its stores in Noida and Ghaziabad, he said: “We do not comment on specific property transactions, we cannot comment on whether we have leased a property from anybody and whether any rent is due and w hat are the reasons for this.''

A group of property owners in Noida, however, claimed that Subhiksha has been defaulting on rent payments for the last five months. “We had a meeting between ourselves to discuss our future course of action as our repeated requests to Subhiksha to clear our dues has not materialised. The company has been promising to either vacate or pay our dues but without any action,'' a property owner said on the condition of anonymity.

Mr Subramanian said, after achieving high growths for the past few years, the company is now suffering the pangs of the economic slowdown.

“The company has grown rapidly over last two years and like all high growth companies, the company has been in pain due to the sudden collapse of equity markets and tightening of the credit markets,'' he said, however, adding the government's stimulus pa ckage could prove helpful in raising debt to fund its financial requirements. - PTI

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