Starbucks CEO sees company paying less rent even after pandemic
Starbucks Corp. is seeking rent relief.
The Seattle-based coffee chain said Tuesday that it’s in talks with landlords for potential lease concessions and expects to pay reduced rents after the coronavirus pandemic passes. Still, the company is current on its rent bills, according to Chief Financial Officer Patrick Grismer, even as many of its stores remain closed.
“We are having ongoing conversations with our landlords in various markets regarding what may be commercially reasonable lease concessions in the current environment,” Grismer said on the company’s second-quarter earnings call. “We’ve not yet confirmed those arrangements.”
Chief Executive Officer Kevin Johnson said it’s “fair to believe” that rents will go down after virus restrictions ease and the U.S. economy reopens.
Starbucks closed roughly half of its about 8,900 U.S. company-operated locations in March and has plans to open as many as possible with modified operations beginning May 4.
Tension has been growing over rents as retailers struggle with the loss of business during the shutdown. Many are skipping payments and some are seeking post-pandemic concessions, arguing that rates should be lower in an economic downturn.