// Mike Ashley’s Frasers Group writes to the PM, urging him to reform business rates
// It called on Boris Johnson to make changes to the transitional relief aspect
// Frasers Group is the new official name of Sports Direct International
Mike Ashley’s retail group has written to Prime Minister Boris Johnson, urging his government to reform the business rates system to ease current high street turmoil.
Frasers Group, which was renamed from Sports Direct International last month, called on Johnson to make changes to transitional relief, the mechanism preventing business rates from falling in line with rent valuations.
Business groups and other retail bosses have called for business rates to match falling rents in order to ease the impact of sliding high street footfall.
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“The current transitional relief results in stores paying the incorrect amount of rates,” said the letter, signed by Frasers Group chief finance officer Chris Wootton.
In the letter, the company – which owns Sports Direct, House of Fraser, Evans Cycles, Jack Wills and various other retailers – said that businesses where valuations are rising “are benefiting from not paying as much”.
Meanwhile, retailers facing a downwards trajectory “are paying far too much” and are “in need of support”, Frasers Group said.
Transitional relief was designed to reduce the increment by which rates, which are based on property valuations, increase following a period of higher revaluations.
However, transitional relief phases rates reductions over five years, meaning it takes retailers a longer time to feel the positive impact of falling property valuations in certain locations.
Frasers Group “welcomed an increasing focus” from the government on business rates, but said current policies aimed at providing additional relief for small businesses do “not address the dire straits many of the medium and large stores on our high streets find themselves in”.
Ashley’s firm has been one of the most prolific investors in the UK retail sector in recent years, acquiring a number of retailers out of administration.
Frasers Group has also repeatedly called for cost reductions and said this would help steady the future of House of Fraser, which it purchased in 2018.
with PA Wires
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