The Company:
Paul Smith UK – Retail Luxury Retail clothing, accessories and jewellery
Our Engagement:
Paul Smith engaged FS to negotiate the exit of their stores in Sydney and Melbourne. We assisted Paul Smith in organising the defit of their store in Sydney and negotiated exit for the Melbourne store. For the Melbourne Store the preference was to end tenancy without taking on the make good obligations in a heritage listed building.
Challenges:
Melbourne: 266.90 sqm
Using the standard make good guide provided by the institutional landlord Franklin Shanks arranged for the scope of works and costings around a make good.
The guide included works outside heritage listing guidelines and not reflecting the condition of the property upon entry.
To meet these and heritage-listed property standards the quote came in at $448,268 +gst. (equivalent to approximately 9 months rent)
FS negotiation was based on Estimated Cost of make good was equivalent to 9 months’ rent more than a penalty fee should Paul Smith had terminated the agreement early. Additionally, the timeline for trades and Heritage building approval timelines actual hand back date would be much later than lease end date..
Sydney: 135sqm
Make good had to be complete by end of term date. FS obtained quotes from companies already inducted into Westfield to save time and costs for works commencement.
The Outcome:
Melbourne: Negotiated a settlement offer for make good as a lump sum payment to the landlord of $200,000 + GST and make good obligation of removal personal items and clean and tidy only. The clients full Bank Guarantee of $270,000 was also returned
Sydney: Full make good to cold shell completed ahead of agreed hand back date. With full Bank Guarantee returned.
From the Client:
“Thank you Kate for all your assistance with closing these two shops. It’s always difficult for a company when you are closing shops in a country where you have no administration team based. The complete process has gone very smoothly and efficiently.
It has been a pleasure working with you.”
- Anita- Commercial Property Manage, Paul Smith UK