A perfumes retailer is taking its landlord to court after accusing it of trying to evict it from stores in favour of a rival business.
The 193-stores chain, The Fragrance Shop, claims it is facing eviction from six branches, each of which generate annual sales of around £1 million, that landlord McArthurGlen plans to let to competitor The Perfume Shop.
In a High Court case that could inspire other retailers locked in battles with landlords, the firm, led by Sanjay Vadera, alleges McArthurGlen has breached the Landlord and Tenant Act 1954.
This typically gives businesses rights to renew their tenancy at the end of a lease. McArthurGlen believes the claims are without merit, and is countersuing.
The Fragrance Shop alleges it long had an agreement with McArthurGlen that it would be the sole perfumes retailer within some malls, but the landlord wanted to change this clause.
The landlord allegedly terminated the tenant’s leases without consultation and decided to offer the shops to The Perfume Shop instead.
A McArthurGlen spokesman said it made “repeated attempts” to resolve the issue with The Fragrance Shop. “We are disappointed that the matter now needs to be resolved in the High Court.”
The legal case is due to be heard on May 13.
If McArthurGlen wins the case, The Fragrance Shop’s six shops will close this summer. The leases at five are already understood to have expired, but the firm has not vacated them yet.
Richard Cressall, a partner at law firm Gordons, which is advising The Fragrance Shop, said: “This question of whether a retailer can be evicted is very important and affects many retailers, in what is already a very challenging environment. This law may be 65 years old but it is designed to prevent landlords like McArthurGlen essentially handing goodwill and trade to competitors.”