// Mike Ashley warns some Sports Direct and House of Fraser stores may have to close
// The warning comes after the government delayed the next business rates valuation until 2023
Mike Ashley has warned that some of his Sports Direct and House of Fraser stores may have to close following the government’s decision to delay the next business rates revaluation until 2023.
Ashley’s Frasers Group said the decision to delay the next revaluation has “kicked” high street businesses at a time when the trading environment is tough.
The group had initially refused to close its Sports Direct stores in March under the UK lockdown, but later followed through and issued an apology.
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Moreover, Ashley said the government had “buried its head in the sand on the critical business rates issue, raising unfair and uneconomic revenue sums from already distressed businesses”.
Business rates are taxes to help pay for local services, charged on most commercial properties.
In March, the government said it would launch a “fundamental review” into the long-term future of business rates during the pandemic.
On Tuesday the government said the next revaluation would not take effect until 2023 based on property values in April 2021.
“Not only has it has kicked the can down the road; it has also kicked businesses when they are clearly down,” Ashley said.
“How many more businesses on the High Street have to disappear and jobs be lost before the government takes this issue seriously?
“How does the government reconcile its maintenance of a punitive and outdated business rates regime, with its predictable and devastating effect on the viability of bricks and mortar businesses, with its recent policy decisions seeking to have customers return to our high streets?”
BRC business and regulation director Tom Ironside said: “Business rates are a huge burden for retailers even in normal circumstances, and the current system has contributed to store closures and job losses across the country.”
“Securing a review of the system is a longstanding priority for the industry, and so we welcome the announcement of the Call for Evidence, which progresses a key objective for the BRC and the industry.
“Over the coming weeks, we will be working closely with retailers to develop our response. The overarching objective of the review must be a sustainable system that is fit for the 21st Century and which reduces the overall burden on retail.”
Frasers Group is yet to update the market on how its portfolio of retailers has performed in terms of sales during the pandemic.
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