Debenhams to give councils ultimatum on business rates
Debenhams is set to give councils an ultimatum in a bid to secure business rate cuts as it works out which of its stores are next for the chop.
The beleaguered department store chain will tell councils that a failure to cut its rates bills could cause them to shut the Debenhams in the area, Sky News reported.
Whether or not councils cut rates and landlords cut rents will influence where Debenhams closes stores. It plans to shutter 28 more shops by 2022, leaving about 100 open. It has already closed 22.
A person with knowledge of Debenhams’s position said the chain was not making ultimatums but was instead engaging in constructive conversations with councils and landlords.
Debenhams declined to comment.
The department store, which has its roots in London in the 18th century, has been engulfed by crisis for more than a year.
It entered administration last year but is now owned by a group of hedge funds who have slashed jobs and shuttered stores as part of a turnaround plan.
Sports Direct owner Mike Ashley has been a major part of the story, having fought for control of Debenhams in an attempt to combine it with House of Fraser, another struggling retailer which he bought in 2018.
Ashley’s legal challenges have been rejected, however, leaving the hedge funds in charge.
UK retailers have suffered in recent years as the economy has slowed and people have increasingly shopped online.
Earlier this month retailers including B&Q, Asda and Ann Summers asked the Treasury to take action on business rates. They said they have “become unsustainable for many retailers”.