The latest fashion news stated, Reliance Retail, one of India’s top retailers invoked to not pay the rent due to the outbreak of coronavirus.
The “Act of God” clause comes into effect during a natural catastrophe, such as an earthquake, a volcanic eruption, a tidal wave, or a situation that is not under the control of humans. The damage caused by natural catastrophes would be considered as an act of god, many insurance policies do not cover the damage caused by this act.
The malls all across India have been shut after the lockdown was declared by Prime Minister, Narendra Modi due to the widespread of Coronavirus. Coming from the seafood market of Wuhan, coronavirus is spread all across the world now causing severe damage and deaths. According to the latest fashion news, it has been around two weeks, since the retail mall's shops are shut, in some of the major cities such as Bengaluru, the lockdown kicked in even before that.
The Central government has called out the situation as “force majeure”, further calling out the situation to be beyond anyone’s control.
The Indian Prime Minister, Narendra Modi, announced the lockdown of the country for 21 days on March 25, but states like Karnataka, Tamil Nadu, and Delhi ordered the closure of malls even before that.
Reliance Retail looking at the current situation may invoke the “Act of God”, to not pay rent, and it’s the biggest fashion news of the period.
As the country is on complete lockdown, there have been no services and markets for the past two weeks. It is estimated by the latest fashion news that it will take the time till May for retail space and malls to normalize. The imposing of lockdown is making both parties suffer from huge losses, it is not just retailers and malls, the list also includes PVR Cinemas.
The retail sector is witnessing a major slowdown, and it is because of the fact that retailers are currently not generating revenue. Large mall owners and developers like Lodha and Prestige have proactively given up rents for the duration of the lockdown. This is an excellent step taken by the authorities as it is reasonable because retailers are facing a huge slowdown and not generating any revenue.
Reliance retail is well celebrated as India’s largest fashion destination with the widest distribution network for mobility and communication devices. It is the retail initiative of the Reliance group and is major to the consumer-facing businesses.
In the past years, it has emerged as the partner of International fashion brands such as Marks & Spencer, Paul & Shark, Diesel, Superdry, Hamleys, Ermenegildo Zegna, Thomas Pink, Kenneth Cole, Brooks Brothers, Steve Madden, Payless Shoesource, Grand Vision and many more.
The company stated a turnover of Rs. 1,30,566 crore for the year 2018-19. According to the fashion news, Reliance Retail operates as on 30th September 2019, had 10,901 stores across 6,700+ cities with a retail area of over 24.5 million sqft.
India’s one of the largest multiplex chain with more than 870 screens, PVR Cinemas just like Reliance retail has also decided to inform malls and landlords that they would be invoking “Act of God” in their rental contract to not pay any rent during the lockdown of the country, as all of its screens operate on rent.
Not only retail shops and PVR Cinemas in the malls even food court are hit by the lockdown. They have zero revenue generated but still have to pay the employees as per the directives from the government.