Frasers Group calls business rates relief ‘near worthless’, mulls store closures
5 Mar 2021
Mike Ashley’s Frasers Group has described the business relief package announced earlier this week by the government as “near worthless” support for bigger businesses.
Chancellor Rishi Sunak announced Wednesday the 100 percent business rates holiday would be extended until June, after which a discounted of two thirds will be available for the following nine months, up to a value of 2 million pounds.
But Frasers Group has criticised the cap, saying it renders the relief a “near worthless support package for large retailers”.
“Further to the budget announcement by the Chancellor Rishi Sunak on 3 March 2021, the Frasers Group wishes to note its disappointment at the business rates relief announced,” the group announced to the stock market on Friday.
“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 group, which owns brands Sports Direct, Flannels, House of Fraser, and Jack Wills, said the decision will make it “nearly impossible to take on ex-Debenhams sites with the inherent jobs created”.
Debenhams was acquired by fast-fashion group Boohoo back in January for 55 million pounds. The deal included the department store’s website and brand, but not its store estate.
Reports followed that Frasers Group was interested in taking over some of the closed sites.
Frasers reviews store estate
Frasers Group said it will now have to review its entire portfolio “to ascertain stores that are unviable due to unrealistic business rates”.
It continued: “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of rates in line with realistic rateable values, but instead we continue to have an unwieldy, overly complex, and out of date business rates regime.”
Last month, the group said it expected a hit in excess of 100 million pounds linked to lockdown following the government’s announced that non-essential stores would remain shut until April.
It said at the time: “Given the length of this current lockdown, potential systemic changes to consumer behaviour, and the risk of further restrictions in future, we believe this non-cash impairment could be in excess of 100 million pounds.
“Any such impairment would be in addition to impairments included in the half-year results announced on 10 December 2020 and is expected to be included, subject to audit, with the company’s results for the financial year ending April 2021.”
Image: Frasers Group