Why Brent Cross Landlords Are In Court Over John Lewis Click-And-Collect Payments

The owner of north London mall Brent Cross is taking department store group John Lewis to court for a cut of online sales from its shopping centre branch in a case that will determine whether digital revenue can still come within the obligations tied to physical premises.

The claim brought by Hammerson and Standard Life Investments, the current and former owners of Brent Cross, respectively, centres on a lease first agreed in 1979 which included a turnover rent provision requiring additional payments once store revenue had exceeded pre-agreed thresholds.

The clause went beyond traditional in-store purchases to include orders “received or filled at or from the premises.”

That provision referred to mail-order and telephone transactions, given when the lease was signed — but it is now being tested against click-and-collect transactions, where the customer buys their goods online but collects them in person. In this case, from the vendor’s store.

For its part, John Lewis has insisted the sale is completed at the point when the goods are dispatched from its distribution network, with the store only acting as a collection point. Therefore, it believes the store does not form part of the disputed revenue.

The legal dispute is based on whether an older contractual wording can be fairly applied to current trading processes that were not present when the lease was originally signed and will provide a test of how far legacy agreements can be extended.

If the determination is in favour of the landlords, it could lead to a slew of further claims and a tightening of how in-store sales are defined in locations where turnover forms part or all of the rental payments.

Other retail landlords with comparable lease structures could also look to revisit their own existing agreements and argue that revenue streams previously treated as external to the premises should in fact be included within store turnover figures.

Such claims would depend on the exact wording of each lease agreement, so the decision will not create an automatic widespread precedent. But it would test historical contractual language and how far this can be interpreted.