Chop’d MD Eddie Holmes: We can’t open without rent solution

Whether it be the end of June, the beginning of July, or tomorrow, for Chop’d managing director Eddie Holmes, the government’s proposed hospitality reopening date is irrelevant.

For Holmes, it’s not a question of when, but how, and without a workable solution to the rent issue, the 14 Chop’d sites across the UK won’t be opening any time soon.

“We don’t know when we’re opening and we’re not committing to a date,” he tells MCA. “We’ve adapted our operating model, cut costs and got PPE for the staff, and in theory it will all work.”

“But the reality of the situation is that there’s no point in opening if the landlords are going to take any money we make.”

With the exception of Canary Wharf Group – which has offered the business a rent-free first quarter and is in discussions to extend this to Q2 – the refusal of most of its landlords to cooperate has left Chop’d in limbo.

“If the landlords still expect to see their pre-covid rents, then what’s the point of reinvigorating the business model?” he says. “It’s pointless.”

And despite preparations for a rental agreement code of conduct, being of the opinion that the Government has “messed up absolutely everything it’s done so far apart from the furlough scheme,” Holmes isn’t optimistic that this government-backed framework will equate to any meaningful intervention.

“They don’t want to meddle in the market because they don’t want to be seen as interventionalist in economics,” he says. “But the argument that they don’t have the money is nonsense.

“It’s a question about priorities and I don’t think we’re that much of a priority.”

Although he acknowledges that landlords have their own bills to pay, Holmes is adamant that maintaining the current rental model isn’t an option.

“Landlords seem to think that regardless of the situation a business is in, it should pay three months upfront,” he says. “But you can’t get blood out of a stone.”

Instead, he says in order for the rental model to be viable in times of hardship, landlords “have to be treated exactly the same as any other supplier.”

In its discussions with suppliers, the businesses has agreed that it will look at repaying its historical debt to suppliers upon reopening, but on the understanding that “if we haven’t got the money to pay them, then there’s no point in them chasing.”

“When it comes to landlords, the old lease market was written so much in their favour that all they had to do in the past was send out a bill and get paid,” Holmes says.

“Clearly, that model is broken. Everyone has to work together, and if landlords agree that we’re all in this together then they need to show that in their actions. Solving the rent issue will be the key to everything.”