Key Interests and Positions
Our position was that the monthly fixed rent should be reduced. This is because sales had significantly declined, and it was becoming difficult to pay the high fixed cost. The pandemic had greatly affected clothes’ sales as they were regarded as non-essential products. The shop needed some time to allow people to readjust to the new normal and start buying clothes like before. Subsidizing the rent for a few months could promote the business’ resilience during the crisis and long-term sustainability. The shopping center management’s position was that our shop could enhance its operations through better cost control and inventory management despite the reduced sales. Maintaining the fixed rent allowed the building management company to earn the usual 10 Euros per square meter each month.
We also wanted a higher rent discount. The contract stipulated that a five percent discount would be applied in case of a drastic sales drop. However, the pandemic was a challenging period that needed more discounts to help businesses go through a difficult time. Neighboring shops in other buildings had received higher discounts. Therefore, we pushed for a ten to twenty percent discount to promote our shop’s stability. However, the management’s position was against this idea because other stores within the premises would also request the same discount, which would significantly impact their annual profits.
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