BRITAIN’s biggest retailers have united against their landlords in an unprecedented rebellion and are calling for a radical change to the way in which they pay their rents.

The retailers are to tell landlords that they will only pay rent monthly in advance rather than quarterly. The revolt challenges one of the key tenets of the property industry and comes at a time when retailers’ sales have been hit by the credit crunch. The upfront payments have a huge impact on retailers’ cash flow.

The Sunday Times can reveal that 16 retailers, which between them account for some £2 billion of annual rent and occupy property worth about £40 billion, have signed up for the campaign.

They include Boots, Next, Argos, Arcadia, BHS, New Look, Carpetright, Carphone Warehouse, DSG and Debenhams.

The move is expected to be strongly resisted by landlords, who include pension funds such as Prudential and Legal & General as well as large property companies like British Land, Land Securities, Hammerson and Liberty International.

They will remind their tenants that they have signed legally-binding leases requiring them to pay their rent three months in advance. One property company chief executive warned: “The idea that we will roll over and let our tummies be tickled is way off target.”

They believe that property owners must become more flexible and accept that changes must be made in an industry largely unaltered for decades. One retailer said: “This has been coming for a long time.”

Some landlords have already conceded that a number of their retailers need help. At out-of-town retail parks it is not unusual for retailers to pay rent monthly. These negotiations are kept under wraps to avoid setting precedents.

The campaign draws together some of the top names in retailing. They include Sir Philip Green, the BHS and Arcadia owner, Lord Harris, founder and chairman of Carpetright, Charles Dunstone, founder and chief executive of Carphone Warehouse, and Stefano Pessina, chairman of Alliance Boots.

Other retailers that have joined the alliance are Homebase, MFI, Peacocks, River Island, HMV, Mosaic (which owns Jane Norman, Principles, Oasis and Warehouse), Dunelm Mill and Topps Tiles.

Property analysts say the relationships between landlords and tenants have traditionally been adversarial.

However, as the high street and out-of-town retail parks see more of their sales being taken away by the internet, the two sides must start to work more closely together.

It is highly unusual for retailers to be so united over one issue. If the campaign is successful, it could be extended to examine the way that evidence is found by landlords for rent reviews.

The campaign is set against a backdrop of harsh trading conditions. The share prices of the big quoted retailers have been falling as investors suspect that their sales are falling sharply. A number of smaller retailers have already been forced into administration and others will follow.

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