Senate inquiry good news for jewellers

Posted July 08, 2014 | By Stephanie Chan • Staff Journalist

In a win for jewellers struggling with high rental costs and negotiations with landlords, the Senate has approved an inquiry into retail leasing across the country.

The motion for the leasing inquiry was made by Senator Nick Xenophon, with whom the Jewellers Association of Australia (JAA) has been liaising as part of a number of projects it is undertaking to assist retailers in overcoming rental challenges.

The inquiry – which will be conducted by the Senate Economics Reference Committee – will investigate if there is a need for a national approach to retail leasing. It will also focus on nine key points, including first right of refusal to renew leases, fair rent adjustments and a national lease register.

“The average spend on rent for the jewellery industry is 14 per cent of sales, so it is a significant expense for industry members,” JAA executive director Amanda Hunter said. “Research also shows that jewellers pay approximately 16 per cent more per square metre than other specialty retailers.”

In addition to high expenditure, other rental challenges for jewellers include rent reviews, renewals, fit out requirements, and the extensive variation in leasing laws from state to state – a particular concern for national chain stores.

Over the next few months, the JAA will be seeking input from members relating to rental challenges as it develops a detailed submission for the inquiry.

The Senate Economics Reference Committee is expected to report back to the Senate on its findings by the end of October.

As previously reported by Jeweller, the JAA is also currently seeking approval from the Australian Competition Consumer Commission to create a national leasing database for the jewellery industry.