After being forced to close its stores in Germany due to the Corona crisis, Adidas has announced its intention to stop paying the rent for its stores. It is the same decision that the Swedish company, H&M, is to implement it. How were the reactions to this decision?
The Adidas and H&M groups sparked a condemnation wave on Sunday 29 March in Germany by announcing their intentions to stop paying their store rents, which were forced to close due to the spread of the Covid-19 epidemic. German Finance Minister Olaf Schultz called on the two big companies to refrain from taking ill-considered measures.
Schultz told the popular German newspaper Bild, "It is very disturbing to see large companies content with the announcement of stopping the payment of rents," calling on the two companies to contact the owners to find solutions.
Adidas Sports Goods, which posted a net profit of $ 2.2 billion in 2019, was greatly affected by the collapse of its sales in China and the closure of its stores on a large scale. The company, based in Bavaria, told Deutsche Presse-Agentur that it was "temporarily suspending the payment of rents, like many other companies."
As for the Swedish clothing giant, H&M, it announced that it would not pay rents about 460 stores after it was forced to close in Germany, explaining to the agency itself that it had informed the shop owners, and hoped to reach a "solution acceptable to both parties soon." The announcements came at a time when the German government unveiled a broad rescue plan aimed at protecting companies and jobs from the economic consequences of the epidemic.
The plan provides for temporary protection for tenants from eviction from their homes or companies if they face financial difficulties due to anti-virus measures.
However, Justice Minister Christine Lanbrecht warned companies' heads against the consequences of exploiting this situation, saying, "It is unacceptable that companies with a solid financial position should stop paying their rents."
German media reported that other companies competing with Adidas such as "Puma" also intends to stop the payment of rents, as well as companies selling electronic devices such as "Saturn" and "Media Market".