Frasers Group stores at risk as Mike Ashley slams business rates revaluation delay

Mike Ashley covid-19 sports direct house of fraser business rates
The government said the next revaluation would not take effect until 2023
// 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.


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“How does the government reconcile its maintenance of a punitive and outdated business rates regime, with its predictable and devastating effect on the viability of bricks and mortar businesses, with its recent policy decisions seeking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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  1. An easy stop gap resolution would be to introduce a blanket reduction of say 25%; however, it’s no certain that any reduction would reduce the burden on businesses, as local authorities any be allowed to simply increase their poundage (%) charge,

  2. House of Fraser is going to shut in my view the majority of the stores as landlords are not going to allow him to pay no rent just because they want the store occupied. In some cases he wants the landlord to pay business rates for him. What business does that.

    Both the Richmond, Lincoln, Reading, Thurrock to name but a few are due to be vacated because he has been paying below market rent.

    Companies are businesses they don’t need to have it as a department store space.

    I personally will not shop at a store that is still in administration and is part of his group.
    H of F used to be an upmarket department store and is no longer the case.

    In the same way that Debenhams was a good department store it is no longer the case.
    The fact both have been in administration means long term one result full closure after a long decline which is exactly what is happening in my view.

    Business rates are suspended until April 2021 so he does not have to pay any business rates as there is a holiday from April 2021 the 2015 level applies but government could grant a further holiday until April 2022 and then kick in the lower Business Rates.

    It’s already factored in that H of F and Debenhams along with most store groups will be a lot smaller than they currently are. I don’t think H of F will be around long term anyway.


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