The collapse of National Car Parks (NCP) has been widely attributed to the sales & lease back of its estate (to facilitate the extraction of cash by private equity owners), whose programmed-in rent rises eventually outpaced revenue growth for reasons outside NCP's control.
The Q. is whether the supermarket sector (where around 50% of stores have been sold & leased back) might be subject t the same problem if the cost of living crisis continues?
Time will tell.
#supermarkets #business
h/t FT
Some hotel chains have used the same sale-and-lease-back model.
Has the whiff of private equity
@ChrisMayLA6 I hope that the board had a claw back clause for the directors profit based bonuses.
Naive wishful thinking, but we can hope
@ChrisMayLA6 Sale and Lease back brings short term gain and long term pain.
Businesses choosing this option enter the last phase of their existance, as there are a million things that can happen to the bottom line, leaving them unable to deal with the increased operational cost.
Emeritus Prof Christopher May
GeofCox
GhostOnTheHalfShell
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