A person wears a protective face mask outside Starbucks in Kips Bay during the coronavirus pandemic on May 13, 2020 in New York City.
Noam Galai | Getty Images
Starbucks sent a letter to landlords demanding a break on rent for the next year as the coronavirus pandemic hammers U.S. sales.
The restaurant company, one of the largest in the country by number of stores, told landlords that starting June 1, for at least the next 12 months, it will need changes to lease terms and base rent.
The Seattle Times first reported Starbucks’ request for rent relief.
CFO Pat Grismer told analysts in late April that the company has stayed current on its rent, but he added that the company was pursuing lease concessions.
“We are having ongoing conversations with our landlords in various markets regarding what may be commercially reasonable lease concessions in the current environment,” Grismer said.
The company estimated it lost $915 million in sales during its fiscal second quarter due to store closures, reduced operating hours and lower customer traffic resulting from the pandemic. Its earnings were cut in half as catastrophe pay for baristas, hourly pay increases and the cost of store safety items such as face coverings weighed on profits.
On May 4, the global coffee chain announced it would reopen 85% of its U.S. cafes by the end of that week after closing about half of its locations in March.
Starbucks declined to comment.