Director of Domina: Government's decision to partially open stores will intensify the crisis
"The cheaters were praised by the government, they were handed reduced restrictions on a silver platter, but we, the honest ones, were smacked with another dose of restrictions," said Dina Bunce, director of the Domina Shopping center, to Neatkarīgā when the changes in trade restrictions came into force. These new restrictions affect 31 shopping centers in Latvia. Yesterday, the government unanimously and without heated discussions decided to allocate 20 million euros to support shopping centers.
For more than a year now, various restrictions have been introduced in the trade sector, which affect every trader in Latvia. During this time, the total losses of shopping centers have reached 79 million euros. At the same time, the existing working capital grant, which is intended to support the industry, does not reach or reach the lessors to a very limited extent - only a part of the tenants receive the grant, and they do not pay the rent to the lessors from the received funds or pay a very limited amount. As a result, the trading infrastructure is very close to insolvency.
Domina Shopping, which, like other shopping centers, was unable to operate normally due to state restrictions, has not received any aid. It is not easy for tenants at the moment either, only 60% of Domina's existing stores have been able to qualify for support. The government's decision to partially open stores by discriminating against shopping centers is only exacerbating the crisis, says Dina Bunce, director of Domina Shopping.
Is it possible to ensure that the same epidemiological requirements are met in the Domina shopping center as in the shops where sales are allowed?
Yes, of course it is possible! And we can prove that Domina has already done everything necessary, including investing a lot of money, to make shopping with us epidemiologically safe. Control of the flow of customers and proper wearing of masks, increased disinfection and operation of the security company, adequate air circulation, etc. - we are already doing all this and will continue to do so to provide a secure on-site shopping that people have a legitimate need for. We are also ready for additional investments, just let us work and do not destroy the industry!
If it is possible to meet all epidemiological requirements, does that not mean that large shopping centers, including Domina, are being discriminated against?
Unfortunately, this is not just discrimination, but outright mocking our industry. The rules, which came into force on 7 April, distort fair competition. Think for yourself - the big malls have been playing by the government's rules all this time (for example, the tenants of Domina have not received a single fine or reprimand, even though the police visit us very often), but some small shops have violated them. But what is the result? The cheaters were praised by the government, they were handed reduced restrictions on a silver platter, but we, the honest ones, were smacked with another dose of restrictions.
If the government does not change the restrictions and does not provide support, will Domina and other large shopping centers not start approaching the point of bankruptcy?
We still very much hope that the government will wake up and finally make adequate decisions. At the same time, we are ready to fight to the end. And if we need to go to law enforcement, we will.
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There will be support
Mārtiņš Vanags, Chairman of the Board of the Alliance of Real Estate Developers, admitted to Neatkarīgā that the rental income of shopping centers has experienced a sharp drop (on average by at least 60%, in many cases up to 100%) and the working capital grant does not reach retail infrastructure.
Latvian Chambers of Commerce and Industry, Latvian Employers' Confederation, Alliance of Real Estate Developers and shopping center - Domina Shopping, Origo, Galleria Riga, Sāga, Ozols, Dauga, Sky&More, Via Jurmala Outlet Village and Valleta - representatives sent an open letter to Prime Minister Krišjānis Kariņš before Easter, signaling the critical situation in the industry and requesting a meeting with government representatives. The authors of the letter emphasize that the conceptual decision of the Cabinet of Ministers on March 26 - to resume trade outside shopping centers, but not to remove restrictions in shopping centers - will only worsen the existing crisis in shopping centers. To avoid this, the industry calls for an immediate decision on granting rent support, reminding that already in early March the working group for business and employee support during the Covid-19 crisis unanimously supported the rent support measures developed by the Ministry of Economy. The progress of this issue is still blocked by the Ministry of Finance, so the Latvian Chamber of Commerce and Industry, the Latvian Employers' Confederation, as well as major shopping centers and the Alliance of Real Estate Developers called for a remote meeting between the industry and the Prime Minister.
Yesterday, the government decided to allocate 20 million euros to support shopping centers. It will be available to a merchant who meets the definition of a micro, small or medium-sized enterprise and whose total turnover from rent has fallen by at least 30% due to the Covid-19 crisis. Shopping centers will be able to receive one-time support of 15 euros per square meter.
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