The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian retailer yesterday said it had made “the hard call” to end its 30-year presence at the Mall at Marathon after being placed “in an impossible position” by its landlord during lease renewal talks.

Egan Kemp, president of Eunison Company, the Shoe Depot parent, told Tribune Business it would have been “imprudent and unwise” to extend the lease beyond today’s expiry in a post-COVID-19 environment because “all options given us” involved rental rate increases.

Some of the Shoe Depot’s 50 employees were yesterday moving inventory and fixtures out of their soon-to-be former Mall location, which will reduce the company’s outlets - at least for the moment - from two to three.

“To be clear we have been Mall tenants since the very beginning in the late 1980s... growing from one bay into a three-bay single store of approximately 4,221 square feet,” Mr Kemp said in e-mailed responses to this newspaper’s questions. “Unfortunately, the Mall has put us in an impossible position.

“Our existing lease expires on April 30 [today]. Our discussions on lease renewal were not successful. We expected that the landlord would take a ‘tenant retention’ approach and factor in the current COVID-19 climate and the dire economic reality of the next several months/years to offer some measure of compromise.

“However, we felt their final offers were not reasonable and instead included periodic increases, while only offering discretionary abatement on a month-to-month basis at their sole discretion, and without any legal protection in the lease itself during the crisis,” he added.

“In planning for business into the future, and anticipating the reality of a COVID-19 impacted world, it would be imprudent and unwise to sign a long or short-term lease at the same pre-COVID-19 rent and which also includes increases like this. So, we made the hard call not to renew the lease, which means closing the store.”

Speaking to Tribune Business subsequently, Mr Kemp added: “All options given by the Mall involved only increases. If I didn’t take a short or long-term increase, they would charge us 20 percent. How do you sit and conduct your business when we’re in this state right now?”

He added that Shoe Depot had been given just a week to move all its stock and chattels, and said: “If we failed to do so, [they] would invoke at least a 20 percent or more surcharge on monthly rent thereafter.

“We aren’t even allowed to rally our employees and go and move out at this time without the express written permission from the Commissioner of Police, given the current curfew emergency orders. So that has added a lot of extra, and what we consider, unnecessary, stress for us all.”

Mr Kemp said the COVID-19 lockdown had forced the retailer to temporarily lay-off non-essential staff, but workers had encountered problems in obtaining the relevant unemployment benefits from the National Insurance Board (NIB) despite the company being current with contributions.

“Every business person I have spoken to and asked the question of has said none of their employees have yet received NIB. Half a dozen said that,” he told Tribune Business.

“As far as we know, none of our employees have received NIB payments, so we have offered a week of owed vacation advanced pay to anyone who wanted it now instead. Unfortunately, the instructions that NIB released stating that a letter in place of a B-80 could be submitted appear to have not been accurate and this may have caused a delay in NIB’s processing.

“It has been very difficult reaching anyone at NIB but I can appreciate the overwhelming volume of applications at this time and the efforts made to prevent fraudulent claims. After many hours of calling and messaging we were able to finally track down an NIB representative that was able to assist us, so many thanks to that person.

“However, it is disappointing that NIB requests greatly detailed information from us for each employee, all of which NIB already has in their system. So, this inefficiency and delay is a major frustration for us and our colleagues.”

Acknowledging that COVID-19 will likely linger for some time to come, Mr Kemp added: “The Government should be just as focused on finding ways to get every single business open as quickly as possible as it is on stopping the spread of the virus.

“This virus could be with us for months, years or forever, similar to the flu, so the Government should be focused on keeping us at work so we can feed, clothe and safeguard ourselves. The economy has been, and is, the pivot for our nation’s success.

“Listening to and understanding the population’s realities is crucial at this time in order to step through this fiscal nightmare. As Bahamians, but especially for those who govern, there will have to be ‘outside-the-box’ thinking that is also practical.”

Revealing that COVID-19 has put paid to “some great growth opportunities” Shoe Depot had planned for 2020, Mr Kemp said: “We were extremely optimistic as to where our operations were headed, especially as the Government had taken very real steps to finally allow footwear and apparel merchants (among other sectors) to import duty-free on these items.

“That means we can price our products competitively against US retailers, particularly among our brands like Skechers where our prices are mostly dollar-for-dollar. Because the savings from duties are reflected in our prices, our customers see immediate savings.

“And so we came into this year investing heavily in some great products and brands now that we can finally compete directly with US retail prices on here in Nassau, and our selection of merchandise has grown enormously. Just prior to emergency closure and even since, we have received some incredible shipments of product,” he continued.

“So we have been very excited about our future and that of local retail, but with the borders closed, and forced closures of what the government considers to be non-essential business, for weeks and possibly months, things are likely never to be the same again. The government is having to react to something completely unknown, and at such a vast scale and so rapidly.

“The pressures they face are enormous. However, I would have liked to seen the Government take a more active role in helping minimise the risk to the economy, since the economy - whatever state it is left in - will have the primary impact on our nation’s well-being for years, not just months.”

Mall at Marathon could not be reached for comment.