Frasers slams ‘near worthless’ business rates Budget move
MIKE Ashley’s Frasers Group says it is considering store closures and is unlikely to take on any former Debenhams sites after a “near worthless” business rates relief package in this week’s Budget.
The retail group – whose stores include House of Fraser, Sports Direct and Flannels – has issued a statement expressing its “disappointment” at the measures announced by Chancellor Rishi Sunak on Wednesday.
The Chancellor outlined a threemonth extension to the business rates holiday for non-essential retail stores and then a six-month period where rates will be discounted to one third of the normal charge.
But he said there would be a maximum discount of £2m for closed businesses, which Frasers said “makes it a near worthless support package for large retailers”.
Newcastle United owner Mr Ashley has been among many who have long been critical of the business rates system, saying it is no longer fit for purpose in an age of online retailing.
But those critics were disappointed earlier this year when the Government postponed a review of business rates until later in the year to allow for the economy to return to some form of normality.
In a statement released this morning, the company said: “Whilst the retail industry as a whole has repeatedly asked for structural reform of business rates, none has been forthcoming. Frasers Group and many retailers would have expected suitable relief until structural reform is implemented. The £2m rates cap on ‘businesses’ from July 2021 to March 2022, makes it a near worthless support package for large retailers.
“For Frasers Group this cap will make it nearly impossible to take on ex-Debenhams sites with the inherent jobs created. It will also mean we need to review our entire portfolio to ascertain stores that are unviable due to unrealistic business rates.
“Frasers Group believes that retailers should pay the fair amount of rates in line with realistic rateable values, but instead we continue to have an unwieldy, overly-complex, and out of date business rates regime.”
Frasers warned last month that it could take a £100m hit to its property portfolio during the pandemic. It had earlier issued a profit warning due to the closure of stores in lockdown.
New figures show that online retail sales soared to a record high in February but this failed to offset another dire month for shops.
The latest BDO high street sales tracker revealed combined in-store and online like-for-like sales fell 3.1% in February in the second worst month since last August.
The £2m rates cap ... makes it a near worthless support package for large retailers