The perfume distributor is taking its owner to court after accusing him of trying to evict it from stores in favor of a competing company.
The 193-store chain, The Fragrance Shop, says it faces eviction from six branches, each generating annual sales of around £1million, which owner McArthurGlen plans to lease to rival The Perfume Shop .
In a High Court case that could inspire other retailers locked in battles with landlords, the company, run by Sanjay Vadera, alleges McArthurGlen breached the Landlords and Tenants Act 1954.
This generally gives companies the right to renew their lease at the end of a lease. McArthurGlen believes the allegations are baseless and is fighting back.
The Fragrance Shop alleges it had a long-standing agreement with McArthurGlen that it would be the only perfume retailer in certain malls, but the owner wanted to change that clause.
The landlord reportedly terminated the tenant’s leases without consultation and decided to offer the stores to The Perfume Shop instead.
A spokesperson for McArthurGlen said it had made “repeated attempts” to resolve the issue with The Fragrance Shop. “We are disappointed that the case now has to be resolved in the High Court.”
The court case is due to be heard on May 13.
If McArthurGlen wins the case, the six stores of The Fragrance Shop will close this summer. The five-year leases have already expired, but the company has not released them yet.
Richard Cressall, partner at Gordons law firm, which advises The Fragrance Shop, said: “This question of whether a retailer can be evicted is very important and affects many retailers, in an already very difficult environment. This law may be 65 years old, but it is designed to prevent owners like McArthurGlen from essentially handing over goodwill and business to competitors.