Frasers Group to review estate after 'worthless' rates relief Budget package
Retailer says measures will make purchase of ex-Debenhams sites ’impossible'
Mike Ashley’s Frasers Group said it may have to close unviable stores after what it called a "near worthless” package of business rates relief in the Budget.
Frasers said the £2m rates cap on businesses from July 2021 to March 2022 to help hard-hit retailers through the Covid-19 crisis, “makes it a near worthless support package for large retailers”. The measure was unveiled by Finance Minister Rishi Sunak in his Budget on Wednesday.
“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.”
The company, which owns Sports Direct, House of Fraser, Flannels and Evans Cycles, called for an overhaul of the existing system, and added that the latest measures would stop it taking over former Debenhams stores.
Frasers said many retailers would have expected suitable relief “until structural reform is implemented”, adding that firms “should pay the fair amount of rates in line with realistic rateable values" but instead continue to labour under "an unwieldy, overly complex, and out of date business rates regime”.
Debenhams' brand and website were bought by fast fashion e-tailer Boohoo for £55m in January, leaving the chain’s remaining 124 High Street stores in limbo.
Frasers last week said it expected to take a hit of more than £100m after the government said non-essential retailers in England would have to wait until 12 April at the earliest to reopen. Frasers Group said the sum reflected expected writedowns of the value of its properties and other assets.
Sunak extended until July a business rates exemption for hospitality businesses including restaurants and pubs have been hit hard by the coronavirus pandemic
The extension will be followed by a further six-month period where rates will be discounted to one third of the normal charge, up to a maximum of £2m for closed businesses.
Tax and spending elements of Sunak’s plans were severely criticised on Thursday by the influential Institute for Fiscal Studies as undeliverable.