Mike Ashley’s Flannels fascia has been granted £125,000 in business rates relief by a local council in order to prevent one of its sites remaining derelict.
Flannels purchased a former nightclub in Doncaster in 2016 with a view to converting it into a new store.
However, despite the fashion retailer reporting a £5 million profit on £62 million turnover last year, its head of property halted development of the site – rendering it unusable and meaning Flannels had no obligation to pay business rates.
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.
The site subsequently opened in October.
In 2011, the Local Government Finance Act 1988 was amended to allow local councils to grant discretionary discounts on business rates.
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”.
Altus Group’s head of UK business rates Robert Hayton added: “In certain areas, with unique challenges, or where there is a loss of an anchor store, it may require councils taking a cut in business rates from businesses that they believe will help become or continue to be destinations and deliver footfall.”
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