Outrage in Germany as Adidas and H&M stop rent payments

People walk past an H&M store in Riga, Latvia. (Reuters/File)
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Updated 30 March 2020

Outrage in Germany as Adidas and H&M stop rent payments

  • Leading companies urged to refrain from taking rash decision that could hurt property owners

FRANKFURT: Global retailers including Adidas and H&M sparked outrage in Germany on Sunday after announcing they planned to stop paying rent on stores that have been forced to close over the coronavirus outbreak.

Finance Minister Olaf Scholz urged leading companies to refrain from taking rash action that could hurt property owners.
“It’s irritating when large companies simply announce a halt on paying rent,” Scholz told the Bild daily, urging retailers to reach out to landlords to find solutions. “Now is the time to work together,” he said.
The retailers’ move comes after the German government unveiled a major rescue package to protect companies and jobs from the economic impact of the pandemic.
It includes a provision that temporarily shields tenants from being kicked out of their homes or business properties if they experience financial hardship over the coronavirus measures.
But Justice Minister Christine Lambrecht warned company bosses not to take advantage.
“It is indecent and unacceptable if financially strong firms now just stop paying their rents,” she said in Berlin on Saturday.

BACKGROUND

● The retailers’ move comes after the German government unveiled a major rescue package to protect companies and jobs from the economic impact of the pandemic.

● It includes a provision that temporarily shields tenants from being kicked out of their homes or business properties if they experience financial hardship over the coronavirus measures.

● Justice Minister Christine Lambrecht warned company bosses not to take advantage.

German sportswear maker Adidas, which made a net profit of nearly €2 billion ($2.2 billion) in 2019, has been hard hit by a slump in Chinese sales and massive store closures.
The Bavarian company, one of Germany’s best-known brands, told DPA news agency that it was “temporarily suspending rental payments, just like many other companies.”
German Transport Minister Andreas Scheuer told Bild he was “disappointed by Adidas,” pointing out that many small, private landlords would be left out of pocket. Swedish clothing giant H&M said it too would not be paying rent on its roughly 460 closed stores in Germany, telling DPA that it had informed landlords and hoped to find “a mutually acceptable solution” soon.
German shoe store chain Deichmann intends to suspend rent and service charges from April for the duration of the government-ordered closures.
A spokesman for the Essen-based company told DPA that it expected those with political responsibility “to compensate for the lost rental income of the affected parties.”
Other German media outlets reported that electronics retailers Saturn and MediaMarkt as well as Adidas rival Puma also planned to halt their rent payments for now.


EU pledges to stay green in virus recovery

Updated 29 May 2020

EU pledges to stay green in virus recovery

  • To help economies from the 27-nation bloc bounce back as quick as possible

BRUSSELS: The European Commission pledged on Thursday to stay away from fossil-fueled projects in its coronavirus recovery strategy, and to stick to its target of making Europe the first climate neutral continent by the middle of the century, but environmental groups said they were unimpressed.

To weather the deep recession triggered by the pandemic, Commission President Ursula von der Leyen has proposed a €1.85 trillion ($2 trillion) package consisting of a revised long-term budget and a recovery fund, with 25 percent of the funding set aside for climate action.

To help economies from the 27-nation bloc bounce back as quick as possible, the EU’s executive arm wants to increase a €7.5-billion ($8.25 billion) fund presented earlier this year that was part of an investment plan aiming at making the continent more environmentally friendly.

Under the commission’s new plan, which requires the approval of member states, the mechanism will be expanded to €40 billion ($44 billion) and is expected to generate another €150 billion in public and private investment. The money is designed to help coal-dependent countries weather the costs of moving away from fossil fuels.

Environmental group WWF acknowledged the commission’s efforts but expressed fears the money could go to “harmful activities such as fossil fuels or building new airports and motorways.”

“It can’t be used to move from coal to coal,” Frans Timmermans, the commission executive vice president in charge the European Green Deal, responded on Thursday. “It is unthinkable that support will be given to go from coal to coal. That is how we are going to approach the issue. That’s the only way you can ensure you actually do not harm.”

Timmermans conceded, however, that projects involving fossil fuels could sometimes be necessary, especially the use of natural gas to help move away from coal.

The commission also wants to dedicate an extra €15 billion ($16.5 billion) to an agricultural fund supporting rural areas in their transition toward a greener model.

Von der Leyen, who took office last year, has made the fight against climate change the priority of her term. Timmermans insisted that her goal to make Europe the world’s first carbon-neutral continent by 2050 remained unchanged, confirming that upgraded targets for the 2030 horizon would be presented by September.

Reacting to the executive arm’s recovery plans, Greenpeace lashed out at a project it described as “contradictory at best and damaging at worst,” accusing the commission of sticking to a growth-driven mentality detrimental to the environment.

“The plan includes several eye-catching green `options,’ including home renovation schemes, taxes on single-use plastic waste and the revenues of digital giants like Google and Facebook. But it does not solve the problem of existing support for gas, oil, coal, and industrial farming — some of the main drivers of a mounting climate and environmental emergency,” Greenpeace said.

“The plan also fails to set strict social or green conditions on access to funding for polluters like airlines or carmakers.”

Timmermans said the EU would keep investing in the development of emission-free public transportation, and promoting clean private transport through the EU budget.