Luxury retailer Flannels given 125k business rates relief

High-end fashion retailer Flannels has been granted 125,000 pounds relief from business rates tariffs by a local council to prevent one of its sites remaining derelict.

Flannels, which is owned and operated by Sports Director founder Mike Ashley, converted a former nightclub into a store when it purchased the space in Doncaster in 2016.

While business rates has been a crippling tax for many struggling retailers, Flannels had a 64 million pound turnover in 2017, reporting profits of 5m pounds.

In an effort to restart work on the development and prevent the site from remaining derelict, the local council offered “support” via a business rates lump sum. “If we are unable to support this investment the unit will remain empty and the area, in general, will continue to look undesirable to new investors,” Doncaster Council stated.

According to the Retail Gazette the Local Government Finance Act 1988 was amended to allow local councils to grant discretionary discounts on business rates in 2011.

Despite their strategy ultimately proving successful, the council said the “help” offered to Flannels might “risk setting a precedent for further retail applications and challenges if they are not supported."

Only 9.75 percent of all retail properties in England have a Rateable Value over 51,000 pounds and are therefore precluded from the new retail relief, says real estate analytics company Altus Group.

Robert Hayton, Head of Property Tax, Altus Group, said in a company statement: “The Budget measures, whilst great for independent retailers with smaller premises, show little thought about where taxpayer money would be best spent and does nothing to help those major retailers who are reducing their store portfolios and headcount often citing high rates as a contributory factor.

“The measures didn’t address the long term unfairnesses for those large premises who’s property value has fallen significantly but are denied the commensurate tax reduction nor did they level the tax playing field with large online only retailers which were the key asks of the sector.”

Photo credit: Flannels boutique, source Flannels website