// Frasers Group CFO Chris Wootton says “tens of thousands of jobs will vanish” if the govt fails to reform business rates
// He says the one-year rates holiday was “very important” but will be “worth little” if they’re not revalued ahead of the new financial year
// His comments come shortly after Frasers Group revealed its annual trading results
Frasers Group’s chief finance officer has warned that “tens of thousands of jobs will vanish” from the high street if the UK Government fails to reform the business rates system.
Chris Wootton urged the government to revalue the property tax to aid the UK high street and help preserve jobs.
After the coronavirus pandemic hit the UK, Chancellor Rishi Sunak halted business rates for retailers until the new financial year starts in April 2021.
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Wootton told the PA news agency that the payment holiday was “very important” for the sector but will be “worth little” if business rates are not revalued ahead of the new financial year.
The government said its next business rates revaluation will take place in 2023, with rates next year set to be based on figures from the latest valuation in 2015.
However, this has faced scorn from retailers who say that retail property prices have slumped significantly since then amid pressure on the high street.
“If they continue to use 2015 figures, it will push lots of retailers over the edge,” Wootton said.
“If they don’t change the system dramatically, the Government will receive hardly any rates anyway as so many retailers will have gone bust.”
Despite praising the business rates holiday and furlough scheme, Wootton remained critical of some of the government’s actions during the pandemic.
At the start of the pandemic, Sports Direct, a fascia of Frasers Group, called on the government to allow its stores to reopen, claiming they should have been deemed an essential retailer.
In March, Michael Gove, the Cabinet Office minister, told BBC Radio 4’s Today programme that Sports Direct made the “wrong call” and affirmed that its stores would remain shut.
“We have been pleased with some Government actions… but we are not sure why they needed to publicly use us as a political football,” Wootton said.
“We asked if we should keep stores open to sell fitness products – we would have wanted a better dialogue.
“I do think some of their actions have been bizarre. They spoke clearly about the importance of people staying fit and healthy but they kept sporting goods retailers shut but allowed off-licences to reopen.”
His comments come shortly after Frasers Group revealed its annual trading results.
For the year ending April 26, the Mike Ashley-owned retail empire recorded a pre-tax profit decline of 19.9 per cent to £143.5 million, while underlying pre-tax profits dropped 18.1 per cent to £117.4 million.
Group revenues increased 6.9 per cent to £3.95 billion, but decreased by 12.6 per cent when excluding newly-acquired businesses, such as Jack Wills and Evans Cycles.
Reported EBITDA skyrocketed 98.7 per cent to £551 million, but this was due to changes in reporting after the implementation of IFRS16.
Underlying EBITDA for the group was up five per cent to £302.1 million.
Meanwhile, in the UK, Frasers Group’s retail revenues saw a mere 0.7 per cent rise during the period, driven predominantly by its acquisition of Game.
Sales across its premium lifestyle category increased 34.9 per cent, which was boosted by Jack Wills and Sofa.com.
The international arm of the business saw sales drop by 19.3 per cent to £174.2 million, while its wholesale and licensing arm posted a two per cent dip in revenues to £160.2 million.
Frasers Group still plans to invest “in excess of £100 million” its digital elevation strategy in the coming year with a “particular focus on Flannels”.
It also warned of more store closures as it continues to shift its focus towards its online business.
with PA Wires