Mike Ashley urges government to reform business rates system quickly
Sports Direct owner Mike Ashley has warned that more House of Fraser stores will be forced to close unless the new government tackles the “broken and unworkable” business rates system.
Retailers have repeatedly urged politicians to take action on business rates, and ahead of his election win Boris Johnson pledged to launch a fundamental review of the system.
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However, Ashley said he will be forced to shutter more House of Fraser stores – even in locations where landlords have agreed to zero-rent deals – if the issue is not resolved quickly, saying his company can wait “months, not years”.
Ashley said: “Thesee are peoples jobs, and these are serious issues. Why don’t we give old Boris a call this afternoon and say ‘if you can do things so quickly, why can’t you sort the rates out?’”
When asked how long Sports Direct could wait for a reform of the system, he said: “realistically months, not years. We can’t keep going the way it is.”
The businessman’s comments came after Sports Direct, which has rebranded as Frasers Group, posted strong profits as it moves towards a more up-market image.
Underlying profit before tax soared 58.1 per cent to £101.8m in the 26 weeks to 27 October, the company said.
Meanwhile, Group revenue increased 14 per cent to £2.04bn, however, excluding acquisitions it dipped 6.4 per cent due to the elevation strategy.
At an event for media and analysts following the results announcement, Ashley said: “I don’t need and I’m not asking for any form of discount, but I can not keep stores open, even if the landlord is charging zero rent and they still lose money.”
In a statement alongside the publication of his company’s interim results yesterday Ashley said the system is “unintelligible” to almost everyone except experts.
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Following the Conservative Party’s victory in the General Election last week, the British Retail Consortium (BRC) renewed its call for a review of business rates.
Helen Dickinson, BRC chief executive, said: “The prime minister must now fulfil his manifesto pledge and urgently begin a fundamental review into the broken business rates system to relieve the burden on retail businesses and create a system fit for the 21st century.”