After months of negotiations brought upon by the coronavirus pandemic, Mosaic Brands (ASX: MOZ) has had 129 of their retail stores temporarily closed by Scentre Group (ASX: SCG), the operator of Westfield shopping centres. 

The tough decision comes after months of underpayment in rent from Mosaic whose retail stores have been severely depleted of foot traffic due to the pandemic and social distancing and will affect popular brands Noni B, Katies, Millers, Rockmans and others. 

Across the 129 stores which have been temporarily closed, more than 400 store employees will be affected by the closures until an agreement can be met between Mosaic and Scentre. 

“These actions are extremely disappointing, given the current environment, and difficult to comprehend in the context of a relationship that spans close to 40 years,” said Mosaic Chairman, Richard Facioni. 

“Mosaic continues to conduct rental negotiations in good faith with all landlords, including Scentre Group, in the spirit of sharing the burden of the impact of the COVID-19 crisis, consistent with Government recommendations.” 

In the first major decision of its kind by a national retail landlord, the decisive action by Scentre may create a new precedent among retail landlords, all of which have suffered significant falls in foot traffic. 

While landlords have been accepting lower rent in the spirit of goodwill through the pandemic in line with Government directives, it has been expected that both landlords and tenants would find middle ground that supersedes the legally binding lease agreements signed prior to COVID-19. 

For FY20, fellow national retail landlord Vicinity Centres (ASX: VCX) has reported a statutory net loss after tax of $1.8 billion. 

Scentre Group are yet to report their full year results.