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“You negotiate and get some relief for times like this. If the situation continues, we’ll perhaps have to extend and ask for greater relief.”
— Ashish Dikshit, managing director of Aditya Birla Fashion and Retail
Earnings call date: Nov. 6
Company description: Mumbai-based fashion retailer
Real estate footprint: Over 3,000 stores across more than 750 cities
Estimated savings: Rent for six months through September dropped about US$18 million from a year earlier
The breadth of the pull-backs is striking. Domtar Corp., which operates paper mills in the U.S., is exploring site closures, while Waste Connections Inc., which operates recycling centres, expects to reduce rents. Even companies in health care, like Tennessee-based retirement home operator Brookdale Senior Living Inc., are securing cuts from landlords.
“The rent reductions that we received are significant and permanent and they total more than US$500 million,” Brookdale CEO Lucinda Baier said on a call in August.
Many companies’ cost cutting plans are still at an early stage, and will take some time to filter through to investors’ bottom lines. As workers prepare for some kind of return to buildings next year, long-term questions about real estate needs may even grow more urgent as concerns about health, safety and human interaction become more entrenched.
“We are going to move into a new world where people have the right balance of working from home and working in the office,” John Rogers, CFO at advertising group WPP Plc, said on an Aug. 27 earnings call. “That will mean that we need less office space going forward.”
Note: Given the limitations of AI and live transcriptions, the total number of companies discussing real estate costs may be even higher.
