Debenhams boss warns time running out to save Welsh stores
DEBENHAMS has warned that “time is running out” to save its four largest Welsh stores.
The high-street chain – which has a flagship store in the heart of Cardiff, as well as a store in Newport – said hundreds of jobs could be lost unless the Welsh Government grants a business rates relief holiday.
Chancellor Rishi Sunak previously granted a year-long rates holiday to all retail, leisure and hospitality firms.
Wales said it would match the pledge but then changed the threshold so large firms cannot benefit.
It means Debenhams faces paying huge sums for stores which are currently shuttered during lockdown.
As previously reported in the Echo, the chairman of Debenhams issued a warning to Finance Minister Rebecca Evans that its stores would not reopen, and has again asked for the Welsh Government to step in.
On Thursday Debenhams chairman Mark Gifford said: “Time is running out to save Debenhams’ four largest stores in Wales.
“I had a constructive conversation with Rebecca Evans this week but the reality is we need a favourable decision if these stores are to be reopened by the administrator and precious jobs saved.
“The way the rating system works, and in particular how it relies on outdated rental values, is a UK-wide problem and also reflects the ponderous approach and inaction of the Valuation Office in updating rateable values.
“When combined with the Welsh Government’s stance to make an active choice to penalise large retailers, we continue to ask Ms Evans and her colleagues to provide support to Debenhams to help our colleagues retain their jobs.”
Debenhams says its stores in Cardiff, Newport, Swansea and Llandudno are still at risk of closure.
The rates on the four stores is £2.5m per year, with Cardiff ’s store in St David’s shopping centre accounting for £1.1m.
A spokesman said the rates liability is “substantially higher” than the rent.
He added: “The Welsh Government’s approach unfairly penalises larger retailers which ‘anchor’ shopping centres.
“Under its proposals, only three retailers (including Debenhams) in Cardiff’s St David’s Centre will be required to pay rates.”
He confirmed the store in Wrexham has been “saved” after help from the local authority, and is now planned to reopen once Government restrictions allow.
In April Debenhams confirmed it had formally entered administration.
It is the second time Debenhams, which employs around 22,000 staff, has entered administration in the past 12 months.
The staple of the high street has 10 stores in Wales.
Debenhams’ 142 UK stores remain closed in line with Government guidance and the company said it would work to “reopen and trade as many stores as possible” when restrictions were lifted.
A Welsh Government spokesperson said: “We decided to limit the NonDomestic Rates (NDR) Relief for the hospitality, retail and leisure sector announced to exclude the small proportion of properties with a rateable value of over £500,000.
“This affects fewer than 200 properties across Wales but releases more than £100m towards our Economic Resilience Fund – enough to support more than 2,000 businesses with grants of £50,000.
“The Economic Resilience Fund will support businesses of all sizes, but especially micro, small and mediumsized, in responding to the pandemic and received 6,000 applications within the first 24 hours of opening.
“We are also delivering a £1.7bn support package to provide businesses in Wales with certainty and stability during these challenging times.
“We will continue to consider how to best target our support where it will have the greatest impact in sustaining jobs and the longer-term viability of our economy.”