Mike Ashley's Frasers Group joins calls for business rates review
Mike Ashley’s retail group, Frasers Group, has written to the Prime Minister, urging the 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 Boris 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.
“The current transitional relief results in stores paying the incorrect amount of rates,” said the letter, signed by Frasers chief finance officer Chris Wootton.
In the letter, the company said that businesses where valuations are rising “are benefiting from not paying as much”, while retailers facing a downwards trajectory “are paying far too much” and are “in need of support”.
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.
The company “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 group has been one of the most prolific investors in the UK retail sector in recent years, acquiring a number of companies, such as Jack Wills, House of Fraser, Sofa.com and Evans Cycles, out of administration. It also owns USC and luxury chain Flannels.
Frasers has repeatedly called for cost reductions and said this would help steady the future of the House of Fraser department store business it purchased in 2018.
Last week, Shoe Zone chief Anthony Smith called on the Government to scrap transitional relief, warning that shops will be forced to close unless the system is overhauled.
Last year, Tesco boss Dave Lewis and Co-op chief Steve Murrells wrote a letter calling on the Government to cut business rates for all retailers by 20% and introduce an online sales levy.