Yahoo Movies Mike Ashley to review his retail empire after Budget’s “near worthless” rates relief
Retail tycoon Mike Ashley’s Frasers Group today launched a blistering attack on the Government’s “near worthless” new business rates support package, and warned it will have to review its entire store empire.
In another blow for Britain’s High Streets, which have been hammered by the pandemic, Sports Direct owner Frasers said it has become “near impossible” to take on the ex-Debenhams stores that it had been looking at.
The FTSE 250 firm, led by Ashley and behind chains such as House of Fraser and Evans Cycles , lashed out just days after Chancellor Rishi Sunak’s Budget set out plans to help companies ride out the rest of the virus crisis.
A business rates holiday will be extended from March to June. From July to March 2022 there will be 66% business rates relief, capped at £2 million per business.
The £2 million rates cap “makes it a near worthless support package for large retailers”, said Frasers, which has more than 900 UK stores.
Real estate adviser Altus Group estimates that the business rates bill Frasers would have had to pay for its shops in the year to March 2021 if no business rates holiday had been given would be around £91.2 million in England and Wales. Frasers did not comment on this figure.
Frasers said it will need to review its entire portfolio to “ascertain stores that are unviable due to unrealistic business rates”. It had also been looking at taking over some vacant Debenhams department stores.
Frasers joins a list of retail and hospitality firms, large and small, that have said the Budget did not go far enough with support.
Smaller firms welcomed a three months rate holiday extension, as well as plans for furlough to be extended, but have pointed out that even though “non essential” stores can reopen from next month, it could take time for sales to recover to pre-Covid levels.
In another hit for some businesses, the rate of corporation tax is to rise to 25% from 19%, starting in 2023.
Frasers said it “wishes to note its disappointment” at the business rates relief. It added that many retailers would have expected “suitable relief” until wider business rates reform is implemented.
Companies will have to wait until later in 2021 for the Government to publish a final report on its review of business rates.
High Street retailers also want to see business rates reformed. The tax is linked to the underlying value of a property, but they are currently based on values from April 2015.
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